As I recall, we have at least one member here on BP that invests and who is an IRS auditor.

If I didn't have the documentation I needed to show I acted in good faith, yeah, I'd probably just pay it and keep perfect records from this point forward.Everyone is afraid of audits but unless you are intentionally doing something you shouldn't be doing, you don't have to fear the tax man and his auditors.

@Brian Pulaski A bit of an exaggeration on my part...just to prove a point...which is taxes are $700/yr on many of these properties that are valued under $30k...when the auditor assesses again, they are looking at the recent transaction price and assigning a new value...they new total value they base the assessment on has risen from $30k to $300k...folks property taxes will increase enough to kill any profits if they were marginal to being with...so, assuming $70/mo. for taxes and realizing $270/mo. is rough...

Check your milage log, match it to oil changes, gas reciepts on charge cards, rent collections at addresses, deposit dates at the bank, if you tie in supporting documents it makes it hard for that auditor to toss it out. :)

I don't think your going to have very good luck getting strangers to give you their drivers license and social security card.To verify that you are talking with the owner simply look up the owners name on the county tax auditor site and when they introduce themselves it should be the same.Now this next part of my answert is just speculating based off of the content in this question; you should not be putting properties "under contract" the only time you should be doing that is if you are ready, willing and able to buy it.

You may also want to consider contacting your local county auditor for a tax delinquent list(these are a gold mine) and a lot cheaper than buying a list online.  

We buy them from the state auditor.

Everybody is screaming at you that it is not right, if everybody looks at it that way, how much more if you are getting paid to perform (aka government auditors)?

An invoice or receipt will help but if you have other issues the auditor is unlikely to trust this. 

. - Should be a win-win: he offloads his property with no work and I get a rental for the work I do (all of it I'll do myself) Property numbers: Mortgage balance: $62kARV: 130kCash out 75% = $97,500Expected Rehab: 15kPay friend total of $92,000 = 62k(mortgage payoff) + 15k (rehab) + 15k (cash)Remainder for me: $5,500--------------------------Rental numbers: - Current Rent: $995/month- Monthly Property Tax: $151 (from auditor's website)- Insurance: $65- Vacancy: 8% = $80- CapEx + Maintenance = 10% = $100- Mortgage (5% , 30yr) = $529Cash Flow = $70 (I was away from my spreadsheet when I posted initially, so I was off on cash flow value)-------------------------------Another option my friend is open to is flipping the property and just selling it after the work and splitting the profit 50/50.