The first could have been a disaster but wasn’t because the client/taxpayer had documentation.
The second should not have been a disaster but was because the client/taxpayer did not have documentation.
Both of these clients are self-employed. Therefore the focus of the audits was on the Schedule C.
All deductions must be substantiated by cancelled checks and/or paid bills.
Rent should be supported by a lease.
Business use of the auto and meals and entertainment should be documented in a diary indicating the number of business miles driven, business purpose of the travel/meal, whom you met with, dollar amount of expenses paid out of pocket, (excluding gas).
In one case the client wrote that they commuted to work but claimed 95% business use. Business use of the auto was reduced to 67% due to this contradiction.
Take these real life experiences into consideration when you prepare the information for preparation of your 2013 tax return.