Are Your Business Expenses Audit Proof?

IRS Business Expense Substantiation Checklist

By Martha De la Chaussee

Former IRS Collection Revenue Officer

Mentor & Trainer • Tax & Business Zone

📞 323-344-2294

🌐 www.taxandbusinesszone.online

The IRS Requires 3 Types of Evidence

To substantiate ANY deduction, you must provide:

1️⃣ Proof of Payment

2️⃣ Proof of Business Purpose

3️⃣ Proof of the Expense Itself

 Step 1: PROOF OF PAYMENT

(At least one required for every expense)

■ Bank statement

■ Credit card statement

■ Canceled check

■ ACH/EFT confirmation

■ Merchant “PAID” receipt

■ PayPal / Square / Zelle / Stripe record

■ Payroll or contractor payment record

■ Cash receipt (with explanation)

 Step 2: PROOF OF BUSINESS PURPOSE

(Explains WHY the expense is business-related)

■ Contemporaneous notes

■ Calendar entries

■ Business emails

■ Client meeting notes

■ Contracts / proposals

■ Work orders

■ Mileage log (vehicle deductions)

Step 3: PROOF OF THE EXPENSE ITSELF

(Shows WHAT was purchased or performed)

■ Itemized receipts

■ Invoices

■ Subscription details

■ Product/service listings

■ Work invoices or job documents

 — Strict Substantiation Categories

IRC §274(d) requires FULL documentation for:

• Travel
• Meals
• Entertainment (limited)
• Gifts
• Listed property (vehicles, phones, cameras, computers)

Missing receipts? IRS may be disallow them.

Call for representation: Martha De la Chaussee

Former IRS Collection Revenue Officer

Mentor & Trainer to Tax Professionals

Tax & Business Zone

📞 323-344-2294

🌐 www.taxandbusinesszone.online

Protect your deductions. Protect your business.