They are typically able to be verified. Whether or not the lender chooses to verify them will probably depend on that specific lenders process.
Most banks will require you to sign an IRS Form 4506T at the time of loan application. This form, once signed can be sent from the lender to the IRS to receive a transcript of your tax return. This way the lender can verify that you are making what you have stated you make on your loan application, or verify the accuracy of income documentation that you have provided (W2's, etc).
Some lenders do not verify 4506's unless they believe there is a discrepancy somewhere in the file. Others will verify most files. Some other lenders will not verify anything until after the loan is closed. In this case they are randomly auditing their loan files to make sure there was no loan fraud committed on the loan.
In the end, if you are applying for a mortgage loan it is important to never state an income figure that exceeds what you actually make. Additionally you should never provide false documentation to the bank in your loan application. Doing such will constitute loan fraud, and can, on some loans lead to criminal penalties.
Answer Submitted on Tue, Dec 9 2008
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