You don't apply for it, it is basically you saying, yes - I fit this and then if you get audited the IRS will ask you for proof.

This actually might be illegal of your CPA to suggest since they can't do/suggest things for the primary purpose of manipulating the audit regime of the IRS as it violates our code of ethics.

No UBTI in a Solo401k.If you qualify for a solo401K it is a great plan, but not everyone qualifies for the Solo401K and if you have a solo401K, but don't qualify, there can be pretty hefty penalties in the event of an audit.

Not only does this help ensure you're taking full advantage of available deductions, but it also provides essential protection in case of an audit.7.

Also possibly if your income was below $150,000.You should ask your CPA how you were able to offset your W-2 income with Rental losses.At the end of the day, you are signing off that the return is correct.If there is an audit down the road and you lose, you can be subject to taxes, penalties and interest.

These records will be essential in substantiating your claim as a real estate professional if you are ever audited by the IRS.Remember that tax laws and regulations can change, so staying up-to-date and working with a tax professional is essential to ensure you're maximizing your tax benefits while following all guidelines.

It was implied that we would likely get audited and they would not be able to defend that claim. 

The IRS will appreciate it when they audit you.

What scares me is what if the CPA I contact also finds it confusing and makes a mistake :OThe only reason I got worried is after I recently heard how one of my teacher's accountant made a mistake and they ended up having to pay fees and penalties and backtaxes for 4 years after IRS audited them.

Unrelated to construction, I am also actively a private IT consultant to PriceWaterhouseCoopers, specializing in big data, cloud technologies, legal compliance, and audit controls (Assurance division), and am an experienced paralegal in the areas of corporate and bankruptcy law.