Theory and Practice may diverge when the IRS considers the Evidence

  "Audits can neither, nor should, level the playing field between small business owners and employees, because the law itself creates an uneven playing field. 

  What audits can do, is to make sure taxpayers who are entitled to claim deductions of certain amounts, or to exclude income of certain amounts, are not overstating these amounts factually, or characterizing payments that are one thing, as something else. 

  But as it has been recognized for many decades, there are trade-offs between a less-than-optimal (from a pure revenue standpoint) allocation of limited IRS resources on large numbers of small businesses, and focusing on small business in order to assure employees, whose income is subject to withholding, and gets reported on a W-2, that W-2 employees are being treated fairly, relative to independent contractors and business owners whose reporting requirements may be looser." - Robert Kantowitz