I am in the middle of a preparer due diligence audit, the irs lady seems very lost in the forms and it took her a whole hour to audit one tax return out of 25 we pulled out for her, and she is promising penalty already !!!!  I have all the 8867 forms in there signed , files with schedule c are printed and signed included with all other documents such as birth certificates social security cards schools and doctors' notes 1099 and so forth, after all that she asking about comments on file !!! some of these files do not have comments since I have the relevant documents that prove the eligibilty for the credit...any experience? anybody?