Often you hear some taxpayer say he or she took a specific deduction on their return, were audited and passed the audit therefore it had to be "legal". I am quick to point out he or she got past a particular IRS agent. I remember once when I was representing someone on a tax audit and the IRS employee in looking over the Settlement Statement where a condo unit had been purchased for rental, said your client took the entire purchase price as basis. (Land cannot be depreciated). Knowing the client could not overcome this problem I jokingly said it was a converted apartment complex and the unit was on the second floor so there is no land. The agent said OK and went to the next item in question.