What are others reporting for income on business purpose loans where the underwriter or LO did not use gross annual income in making the credit decision? Do you take what is disclosed for the income they used, or do you actively search for the gross annual income?

I report whatever it is they used, or didn't use.

We do the same as Joker.

I agree. You shouldn't try to guess. The LO/Underwriter should be telling you what they used for income. Otherwise, your system is set to fail.

We are creating procedures to avoid future inconsistencies on what income is reported. If the loan is over a certain amount we will use a large line review, if it falls under the said amount we will have an income analysis.

I agree that we should take what they use, but the rule states that you must use the gross annual income used in making the credit decision. What if they didn't use gross annual income, instead used net income or cash flows?

If net - Use what they relied upon. That's what Joker, NSF and I have consistently stated above.
If cash flows - there is a lot of debate whether this is "income". You can search here and find many discussions on this.