How to Protect Tax Deductions and Beat an IRS Audit the Right Way

Saving money on taxes is only half the battle. Keeping those savings when the IRS comes knocking is the other half — and that’s where most taxpayers get it wrong.

In this episode of The Lyon Share Podcast, Ed Lyon is joined by returning guest Paul Channo, a 26-year-old Enrolled Agent, Certified Real Estate Tax Strategist, and bestselling author of The Ultimate Tax Log. Together, they break down what the IRS actually looks for in an audit, why most tax strategies fail under scrutiny, and how proper documentation can be the difference between winning and losing.

This is not about flashy tax hacks — it’s about doing things the right way so the savings stick.

About the Guest — Paul Channo

Paul Channo is an Enrolled Agent licensed through the U.S. Department of the Treasury and a Certified Real Estate Tax Strategist. He specializes in helping real estate investors and business owners properly document tax strategies so deductions survive IRS audits. Paul is the author of The Ultimate Tax Log: Beat the IRS in Your Tax Audit.

Key Topics Covered
Enrolled Agent vs CPA — what’s the real difference

Ed and Paul explain why Enrolled Agents are federally licensed tax specialists, how their authority compares to CPAs, and why “CPA” does not automatically mean “tax expert.”

Why tax is becoming a dying profession

A candid discussion about the shortage of young professionals entering tax, why most CPAs avoid tax work, and why specialization is the future of the industry.

The hidden risk behind popular tax strategies

Why short-term rentals, the Augusta Rule, and bonus depreciation can fail if you don’t follow the rules exactly — even when the strategy itself is legal.

Material participation explained in plain English

What the IRS actually means by “regular, continuous, and substantial” participation, including:

The 100-hour rule

The requirement to work more than anyone else involved

Why cleaners’ hours matter

Why documentation matters more than intent

Why social media tax advice is dangerous

TikTok and Instagram explain the upside — but not the audit risk. Ed explains how “exceptions to the exception” trap taxpayers who don’t understand the details.

The Augusta Rule and real audit failures

Real tax court cases where taxpayers lost deductions because they failed to properly document:

Fair rental value

Business purpose

Attendees

Supporting receipts

The Ultimate Tax Log as “tax deduction insurance”

Why Paul’s book isn’t something you buy after an audit — but something you use before one to eliminate fear and protect deductions.

Key Takeaways

Tax strategies don’t fail — documentation does

An audit is about proof, not promises

Social media rarely explains the full rules

Real estate losses are paper losses, not cash losses

IRS audits are survivable when you’re prepared

Logs and records remove fear and uncertainty

Memorable Quotes

“TikTok tells you how to save taxes. The IRS tells you to prove it.”
“Short-term rental losses aren’t magic — they’re earned through documentation.”
“This book isn’t about beating the IRS after an audit. It’s about never losing one.”
“Tax planning without record-keeping is gambling.”

Who This Episode Is For

Real estate investors using short-term rentals

Business owners using the Augusta Rule

Anyone using bonus depreciation or cost segregation

Tax professionals looking to protect client deductions

Listeners tired of audit anxiety

About the Book

The Ultimate Tax Log: Beat the IRS in Your Tax Audit
By Paul Channo

Available on Amazon in paperback and hardcover. Designed as a year-round working log to document material participation, business use, and compliance for IRS scrutiny.

Connect & Subscribe

Follow Ed Lyon on LinkedIn
Visit EdwardLyon.com
Subscribe to The Lyon Share Podcast on Apple Podcasts, Spotify, and YouTube





The Lyon Share Podcast is a practical, no-nonsense show focused on tax strategy, financial decision-making, and real-world planning for business owners and high-income earners.

Hosted by CPA and tax strategist Ed Lyon, each episode breaks down complex tax concepts into clear, actionable insights covering small business taxes, retirement planning, real estate strategies, IRS rules, and proactive year-round tax planning.

This podcast is for entrepreneurs and professionals who want to stop overpaying taxes, understand the rules before they change, and make smarter financial decisions with confidence.