Although you might have an argument it's not something I'd bet on in an audit. 

You don't want to make a big mistake and have to unwind it years later or worse face an audit.

In your case, since you reduced the reported amount on the 1099-S to reflect the actual amount you received after the payment to the program, you might want to have the documentation from the county's request readily available.While it's not mandatory to submit the documentation with your tax return, having it on hand can be helpful in case of an audit or if the IRS requests additional information.

If we are talking about partnership return, and you didn't/couldnt not elect out of partnership audit regime, you cannot just amend your return and you have to file AAR. 

I don't want to waste time filing each period if it's not necessary, but I also don' t want to have to deal with audits and penalties if it is. 

It helps you to treat it as a business and when the IRS audits you, that’s important.

They also have an "Audit" feature that tracks all document signature requests, completions, and those still outstanding.I give it 4.5 out of 5 stars!  

If I started an LLC and used NAICS code 531390, the IRS would keep a closer eye on my company and I have a higher likelihood of being audited VS. me not having an LLC...

Have you been audited before by IRS regarding a cost seg.?

@Jim P.While both solo 401k participants funds may be held in one bank account, from a long-term planning perspective, distribution, planning, and audit perspective, it may be best to hold each participants funds in separate participant accounts.