Audit representation starts long before the IRS calls. The solo CPA who can defend a return in exam does not improvise on day one of the engagement — they keep the §6001 contemporaneous record from intake forward, so when the 30-day letter arrives the workpaper stack already proves the deduction, the income, and the substantiation without reconstruction. This post walks through the four working-paper categories the IRS actually pulls during a sole-prop exam, the IRC pin-cite each one needs to carry, and where the scanner slots in alongside the practitioner-side review that still has to close the loop.
1. The §6001 contemporaneous log
§6001 requires the taxpayer to keep records sufficient to establish the amount of gross income, deductions, credits, or other matters required to be shown on a return. The contemporaneous catch is not a formality — Treas. Reg. §1.6001-1 and the case law (the Bradshaw brothers cases, the Sanford pin-cite line) treat reconstruction from post-event summaries as substantively weaker than contemporaneous entries. Calendar-based apps with start-stop timestamps beat estimating hours from memory every time at exam. A log entry written the same week as the underlying transaction is the threshold; a log written at year-end from a vendor invoice is below it.
2. The §274(d) substantiation stack for meals, mileage, and travel
§274(d) imposes its own substantiation rules on top of §6001 — by statute, no deduction is allowed for travel, meals, entertainment, gifts, or listed property unless the taxpayer substantiates by adequate records or sufficient evidence the amount, time, place, and business purpose. The four-element requirement is on the statute itself, not on the regulations. A mileage log that records miles but not business purpose fails §274(d) before it ever reaches §6001; a meal receipt without an attendee list fails the same way. The examiner asks for the four elements in writing first — the §6001 ledger second.
3. The §162 ordinary-and-necessary documentation
Trade or business expenses under §162(a) require ordinary-and-necessary documentation that the deduction is paid or incurred during the taxable year, the amount is determinable, and the expense bears a proximate relation to the operation of the business. The three-part test tracks Kozlowski, Carrizo, and the rest of the §162 allowability line — and the practitioner must be able to point at the receipt, the bank record, and the business-purpose memo on the same deduction. The trap for solo practices: the receipt lives in the email inbox, the bank record lives in the accounting software, and the business purpose lives only in the practitioner’s head. The audit posture fails when the three do not coexist on a single working-paper trail.
4. The §199A QBI substantiation for any pass-through or Schedule C
§199A QBI deductions carry their own substantiation load: W-2 wages paid by the qualified trade or business, UBIA of qualified property, and the SSTB determination for any trade or business above the threshold. The §199A Reg. §1.199A-1 through §1.199A-6 framework spells out the recordkeeping obligation. A QBI claim that fails the W-2 wage test on a Schedule C return (where the practitioner is both the sole employee and the only owner) is the single most common §199A-side exam adjustment at the solo-practitioner scale. The contemporaneous W-2 ledger and the SSTB determination memo are the two documents the examiner pulls first — and they had better exist before the 30-day letter.
Where the scanner fits
The Taxerity.AI scanner surfaces the same four working-paper categories on the practitioner’s own engagement queue that an examiner reviews in exam — pairing each deduction against the IRC pin-cite (§280A home-office, §162(l) SEHI, §274(n) meals, §274(d) mileage, §162 ordinary-and-necessary) and the §6001 ledger posture the case law expects. It does not replace the practitioner-side review that closes the audit representation loop — it surfaces what the examiner is going to look for, inline with the citation chain, so the working-paper stack is already in shape when the call comes.
Closing
Audit representation is a working-paper posture, not an engagement-letter clause. The solo CPA who keeps the §6001 contemporaneous record from intake forward, who carries the §274(d) four-element requirement on every travel/meal/mileage entry, who maintains §162 ordinary-and-necessary documentation across the three-part test, and who substantiates §199A at the practitioner scale ships exam-ready returns without an emergency reconciliation cycle the week before the audit opens.