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There are those who believe that a return showing a milion dollars of positive cash receipts is more likely to be selected for audit than one showing half that much. I'm glad you know what IRS does, because I don't. All I know is what employees are told to do by the Internal Revenue Manual:
If there is a Schedule C or C-EZ (TY 2018 and prior) attached to the return and the principal business is listed as real estate broker, real estate sales, building, construction, or remodeling; or the principal business activity code indicates related business, for example, 233200, 238160, 238900, 531210, etc., consider REAL amount(s) fully reported when:
Gross Receipts on Schedule C or C-EZ (TY 2018 and prior) are larger than the REAL amount(s),
The TP reports the exact amount of the IR(s) on Schedule C, line 6, C-EZ, line 1 (TY 2018 and prior), or
The TP includes the REAL on an attachment.
