 Therefore, conducting due diligence is crucial in order to ensure the exchange funds are being held in a safe manner and the Exchanger's (entity/individual deferring taxes via 1031 Exchange) funds are protected in the event the Qualified Intermediary can't provide the funds at closing.In addition to that, it's important to make sure the QI being used is experienced and understands the tax code thoroughly.IRC §1441 et seq.