Re-creating missing receipts
But wait… there IS a solution!
First, many retailers such as Amazon keep a record of your orders on file under your account. Which means, all you have to do is log in to your account, look up the transactions in question, and Voila!, your receipt.
Second, even though the IRS prefers to see the hard copy of a receipt during an audit, they will accept proof such as credit card statements, canceled checks, etc. Go through your bank statements, and make copies of the necessary information to show that you made a reasonable effort to re-create what was lost. Write down as much information as you can on the copy so that the potential auditor (and you!) will understand what you were thinking in putting that statement in your tax records. Remember that most audits don’t occur until several years after the tax return was filed, so you probably won’t remember why that bank statement was thrown in with your tax receipts.
But what if you paid cash? This is the third and most difficult situation to prove, but it’s not always a total loss. For example, when you go out to dinner with a group of writing friends and the restaurant has the dreaded “No Separate Checks” sign. Write down the information you would have put on your receipt. For example, “Dinner with agent to discuss my new contract. We had separate checks, and my agent needed to put it on his card, so I did not get a receipt. I paid $20 cash.” Then, use that piece of paper as your receipt. Sometimes the IRS will disallow this expense, but they have also allowed this in some situations. The better job you do of documenting the receipt, the more likely the IRS is to allow you to take the deduction.
