Your audit chances would be pretty high under normal circumstances.

Also you have to have SEC compliant audited financials.

I pulled this example out of the IRS audit guide when reviewing a cost segregation.A simple example illustrates the tax benefits of a cost segregation study.

The specific authority of this board per our operating agreement are as follows:(1) Approval of annual (or semi-annual) budget submitted by the Chief ExecutiveOfficer.(2) Setting compensation for Officers.(3) Setting compensation for Managers.(4) Approval of profit distributions and profit and loss allocations to the Members.(5) Quarterly review of the profit and loss statements and balance sheets.(6) Review and audit of year end financials.(7) Approval of any single expenditure over $10,000.(8) Approval of new hires.

Let us know if you’d like help setting up clean bookkeeping and tax reporting for this deal—it’s key to staying audit-proof and maximizing deductions.This post does not create a CPA-Client relationship.

And what records do you provide your accountant in case there's an audit? 

CPAs are absolutely well qualified to handle any tax situation that arises, but there are good tax professionals out there that are EAs (enrolled agents) who not only can provide tax advisory services, but also prepare your tax returns, and if necessary, represent you before the IRS.I understand you may not think this is a necessary expense due to your current revenue, but if you have an issue like an audit, it would be better to have an EA or CPA that can represent you before the IRS than going solo.

In fact, our agreement has a section in it that forbids us from making any alterations to the building without the owner's written permission, and I'd recommend that if it isn't in the agreement already.As far as red flags:OWNER'S RIGHT TO AUDIT.

Are they required to have a third party audit, and if so, can it be any CPA firm or does it have to be a Big Four, regional, etc. 

Taking a DIY approach is not advised unless you have the right experience and expertise.Otherwise, you may find yourself falling victim to the pitfalls below.Lack of DocumentationOne of the biggest pitfalls of cost segregation studies is inadequate documentation, such as:Missing invoices Inadequate supporting evidence for your cost allocationsImproper or incomplete descriptions of reclassified assetsHaving insufficient records can create headaches and challenges during IRS audits.