It is upsetting to read about knowledgeable people, doing all the things right, and still get audited by IRS. I plan to do all I can to minimize the audit probability.
I plan to claim all the qualified expenses but will not be too aggressive. I understand all receipts must be kept in case of an audit, but I have not seen it mentioned about how long it needs to be kept. I understand that IRS has a rule that if income has not been reported, there is no statue of limitation. Since qualified 529 withdrawal does not have to (and cannot) be reported, can IRS come back in more than several years and do an audit. This could be for some other events, and they decide to look back more years.
If you can claim scholarship on 529 withdrawal, this will force you to report some 529 withdrawal (earnings portion). Then, I believe that IRS only has about 3 years to do an audit. Am I right that this would be a preferred strategy to try and minimize audit probability?
Anything else I can do?