0% mortgages

[George P.]

Some gurus (like Richard Roop in his Free and Clear Course) teach investors (among other things) to get interest-free loans from sellers of free and clear houses.
I guess my (ethical) dilemma is not in the asking for and getting 0%. It's in the knowing that IRS will require the seller to pay income tax on interest he didn't receive.

It's my understanding that the seller will be required to pay interest only when IRS audited the tax return? Or is there an automatic flag in the IRS system that will trigger a letter to the taxpayer demanding to report the income tax?

I mean, how does it all stack up for an ethical investor - getting the most desirable interest rate of 0%, not being able to sleep at night knowing you didn't disclose, hoping the seller will not get caught by the IRS ?...

Anybody???