The tax guide in Monday's Washington Business section should have explained that the new federal Form 1098 used to report mortgage interest received in excess of $600 is required only when the interest is received by a trade or business. Individuals who receive mortage interest are not required to complete the form.

The Reagan administration's plan to sell off billions of dollars' worth of federal assets to help reduce the huge budget deficit is a wicked deception: It is a transparent effort to avoid the tough decisions that are necessary -- cutting expenditures and raising taxes.

Under the heading of "privatization," the Reagan budget calls for selling the Bonneville Power Administration and three other regional power agencies, the Naval Petroleum Reserves at Elk Hills, National Weather Service satellites, and other miscellaneous goodies that would yield about $7 billion in fiscal 1987 and $10.5 billion in fiscal 1988.

About half of these totals would come from abandonment of new public-housing projects in favor of "vouchers" -- prepaid hunting licenses for poor families to find and rent a house or an apartment on the private market.

Just picture the nation's builders rushing out to build low-cost units for the poor, the elderly, the handicapped -- and the Indians! "It's the biggest boom for slumlords I can imagine," snorted Michael Sumichrast, the respected chief economist of the National Association of Home Builders.

How did we get into this privatization nonsense? Of course, an immediate spur was the need to meet the Gramm-Rudman-Hollings budget deficit targets, now at least temporarily sidelined by the U.S. Court of Appeals ruling Friday that the automatic procedure is unconstitutional. But Reagan's decision to unload assets reflects his basic commitment to shrinking the size and power of government.

Underlying this ideology is the assumption that a private company can always do business more efficiently than the government.

That must be real news to General Dynamics Corp. and other defense contractors whose overruns add up to multibillions of dollars; to the many hundreds of banks and savings-and-loan institutions that have gone bust or been bailed out by the federal government, and to Arrow Air, the small private airline that carried 248 U.S. servicemen to their deaths in December near Gander, Newfoundland.

The Pentagon, trying to save a few dollars, contracted for their return trip from the Middle East, instead of flying them back in military planes.

After a routine investigation, the Pentagon has extended Arrow's contract. Performance, said a Pentagon spokesman with a straight face, was satisfactory. I wonder how the families of the 248 feel about that.

How long must we pay homage to the myth that the public sector is inefficient and the private sector efficient? This is not a black-and-white issue. God knows, the inefficiency of government bureaucracies can be staggering.

But the record in private-sector bureaucracies can be equally bad. Look at how the American auto industry has screwed up in its effort to match quality performance of foreign manufacturers.

It is to be hoped that Congress will take a jaundiced look at the ridiculous garage sale that Reagan is trying to pull off.

The reason that people worry about the deficit is that it takes money from the private sector that otherwise would go into capital formation, and create jobs.

So what do you do when you sell government assets? As Northwestern University Prof. Robert Eisner points out, you take money from the private sector in just the same way you would if you were selling bonds or T bills.

In other words, in selling off these assets to make the budget accounting sheets look more acceptable, the Reagan administration hasn't changed the economic impact of the deficit at all.

Eisner wrote in a Washington Post article that sluffing off assets to reduce the deficit is "as bizarre as suggesting that a family sell its $100,000 home to make its $50,000 mortgage disappear.

"The federal government's assets are creating wealth for the nation. When the government builds an airport, for example, it is creating wealth for the airlines, and the passengers who use the airlines to do business. That is not bad for the country."

It's reasonable, I suppose, to ask what sort of commercial-type operations are being performed by government at all levels -- national, state, and local -- that the private sector could do equally well.

Garbage collection, about which much noise is made, may well be something that private companies can do better than municipal governments. Great! Let the garbage go.

On the federal government side, production of electric power may be an example of a function that now ought to be turned over to private hands, even though the government got into the power business originally because the private-power boys didn't want to risk their money in generating electricity for rural areas.

But if it makes sense to sell Bonneville -- despite the enormous negative impact on the Northwest that will come once a private buyer boosts the subsidized Bonneville rates -- it should be for the reason that the subsidy can no longer be justified, and not to make a quick dent in the federal deficit.

Above all, it is time to quit denigrating the public sector. It may not be fashionable any more, but let me risk reminding Mr. Reagan that the public welfare (dare I use the word?) is more important than private profit.