The IRS is usually willing to make deals, especially after the large budget cuts carried out by the Republican-controlled Congress. The cuts have not only sapped morale inside the IRS, they have also made reaching an agreement with taxpayers more imperative.
Two things about audits:
1. It is important to be as prepared paper-wise as possible. The IRS appreciates good document preparation and is much more likely to give well-organized taxpayers the benefit of the doubt about their deductions.
2. Taxpayers should never represent themselves during an audit. This is probably even more important than item #1. IRS agents are well-trained and knowledgeable. They audit thousands of returns and recognize landmines immediately. They know exactly how to question taxpayers to obtain the answers they need. The audit is like a 1000 to 1 match during which taxpayers unfailingly become emotional, the worst possible posture. From that point on they become an easy source of additional revenues for the IRS.