Claiming REPS is a red flag for auditors, so be sure you log everything in detail with your CPA from day one. 

While it’s becoming more common to audit tax filers on this particular aspect of the tax code it is still not too common or understood by even the seasoned IRS auditors, let alone the new 89,000 employees. 

If you are in the Kansas City Metro area in specific, note that Overland Park is considering banning STR or creating a licensing program - I guess they have nothing right now.Kansas City Missouri's auditor told them to petition the state to change law so they can tax and fee as hotels and to make their licensing program more streamlined and easier to enforce as only 7% of STR are permitted.We have several articles on our REIA's blog.And no matter where you are, these are probably the same issues you may be facing as cities far and wide are working to limit STR as there is a shortage of regular rentals.

Banks are regularly visited by federal auditors and work hard to keep in compliance with properly handling transactions.

The auditor has some info, too.As for ARV, I am looking at comps from CMAs that brokers and agents provide in addition to the websites everyone uses.Having a crew ready to work (and a lawyer, and a good title co.) seems prudent.

You can usually find this information (taxes) on your local auditor's website.

No auditor will look at every transaction, but they pick a fair number to try to find any issues, as well as review the General Ledger entries, bank reconciliation reports, etc in an attempt to find any wrong inputs, or worse, blatant fraud.

(On Maple Street only about 3 blocks long I owned 12 houses...once I bought into the street I found value and became known as a cash buyer who maintained their properties so my phone rang and I shook hands on the street to keep it ringing.)Always check ARIES the Lucas County Auditor site.

@Neil SmithPull a list from the auditor of what you're looking to call, load it into a dialer, call the numbers and ask to speak with the owner (their first name) - Introduce yourself by being personable (Who you are(first and last name - age/background), where you're from(local guy), and get straight to the point - why you want to buy and if they're interested in hearing an offer on their property - it's like a quick handshake over the phone. 

When we're getting into the weeds here, @Keith Consiglio, the real question we're untimely asking is "If a state or federal auditor looked at what I did, would this cause any headaches for me?"