I want to open a trading account that will allow me to trade short on
equities. I've checked with Interactive Brokers and Cybertrader, and
they don't allow one to short while trading an IRA (i.e., their 'cash'
accounts can't trade short, and all IRAs have to be 'cash' accounts).
Is this because of IRS rules, or is there another online trader
offering low commission, real-time trades that allow shorts and
options on their IRA accounts?

If you'd like to short equities with your IRA, a possible solution is
Profunds ULTRASHORT OTC fund.

Thanks very much to just4fun2 and paulft. I am aware of those funds
and intend to use them as the market shows a clear tendency to drop. I
have an investment advisor who uses a short strategy with very brief
market entries to trade individual equities. thus I want to know if
IRS rules forbid shorting equities in an IRA/401k.

Yes, you cannot make a margin loan in an IRA and that is a requirement
to shorting stock. I am not certain if it is an IRS rule (likely is)
or an exchange rule (who governs margin regs) but it really shouldn't
matter. The result is the same. No shorting.

Hence, the options suggested -- in essence "long" holdings where the
investment companies utilize shorting strategies are your only
solution.