I would audit my books every week if I was in business with these snakes.

I'm not saying the IRS would go searching for it, but if it was pulled for an audit, then that is what they would do.Also, if you refi the property with a ton of debt and then contribute the property and mortgage to the corporation under §351, then the IRS will consider that a sale also.Joe

I would give him power of attorney to go look.Conversely, you could contact a CPA firm and authorize them to do an audit of the books make sure they have a copy of the management contract.If the management company does not comply with these "inspection requests, then I would terminate them immediately, if your contract allows for it.Then, I would contact an AMO firm, through the institute of Real Estate Management, or another firm recommended by someone you trust, to take over management duties until you return.The events you describe seem to point at a company that may have numerous problems, including proper and effective communication.

You HAVE to have check book control if you manage rentals.The other issue is at some point the IRS will start auditing SD-IRAs and the penalty for non permitted transactoins in a 401k is much smaller than for an IRA.  

Given you've done this, you will need to have very detailed records to survive an audit and prove you're not done any prohibited transactions. 

Then, when you go to sell your wife's old primary and use the exclusion again (more than once in two years), the IRS algorithms will pick it up and you can almost bet you'll be getting correspondence/potential audit from the IRS.

@Joel Owens, my group's tax and legal expert devotes a good deal of his time training IRS agents in the proper interpretation of the tax code, especially in the past five years dealing with an audit of one of my group's leaders (Mark & Co. won the audit, of course!).

If you can make a reasonable argument that what you are doing is not tax evasion, you will be in a much better position to defend against an audit.  

So an EA can prepare taxes and can represent me in case of an audit but just can't represent me in court... according to the EA himself :-/ any thoughts?

NOTHING is for sale at our presentations, and instructors of the classes are forbidden to sell anything in the course of the class.With the gurus, you take the class(es) once, and they may let your repeat (audit) the class(es) once, that's it.