Hello and thank you for using Just Answer,
The IRS sets the requirements of what information they require in a situation like yours.
For your friend:
If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. Show how much of the interest each of you paid, and give the name and address of the person who received the form. Deduct your share of the interest on Schedule A (Form 1040), line 11, and print "See attached" next to the line. Also, deduct your share of any qualified mortgage insurance premiums on Schedule A (Form 1040),
line 13. Yes, each and every year.
Similarly, if you are the payer of record on a mortgage on which there are other borrowers entitled to a deduction for the interest shown on the Form 1098 you received, deduct only your share of the interest on Schedule A (Form 1040), line 10. Let each of the other borrowers know what his or her share is.
You did not answer if we can each take other than equal shares of the interest deduction so long as the total does not exceed the total interest.
Anne did mention that you were to "show how much of the mortgage interest each of you paid", this equates to mean that you are only to show the true percentage that you each paid. If that is equal fine but if one of you paid more than the other, you should only each report the amount of interest that you paid. No, you cannot split it any way you choose.
The 1098 filing requirements instruct the bank (or other issuer) to list the SSN of the first person on the loan. The bank is not bound to report anyone else's SSN because as stated above, the IRS has specific procedures for reporting interest if someone does not receive a 1098.
As far as any legal reasons under Illinois law that forbids the bank further would fall under legal as it does not have relevance to tax issues.
Another expert wanted me to advise you on the following:
What I do in this type of situation is report the full 1098 on the payee's return. I also report Nominee to XXX-XX-XXXX with a negative of the amount allocated to the other party. On the other party's return I report Nominee from YYY-YY-YYYY for the amount allocated. This way the IRS can trace the allocations.