The Real Estate Professional Status Navigating REPS Audits: Insights from a Former IRS Agent
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Jan 4, 2024 Yisroel Jacobovitch, a former IRS agent turned private practitioner, shares valuable insights on navigating the often daunting world of IRS audits. He discusses the complexities of Real Estate Professional Status audits, emphasizing what triggers them and the IRS’s scrutiny. Yisroel highlights essential strategies like accurate record-keeping and effective communication with auditors. Listeners also learn about proactive measures to minimize audit risks and best practices for documentation that can make all the difference during an audit.
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Switching Sides
- Yisroel Jacobovitch, a former IRS agent, shares his experience working for the IRS.
- He transitioned from auditing tax returns to private practice, helping clients navigate audits.
High Audit Rate for REPS
- Real estate professional status (REPS) is highly audited due to the potential for significant tax deductions.
- Returns with large deductions are flagged, increasing audit likelihood.
The Depreciation Decoy
- Be prepared for the IRS to start an audit with a seemingly unrelated issue like depreciation.
- They may then unexpectedly delve into REPS qualifications during the interview.