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Audits - Travel and Entertainment Deductions - Your Burden of Proof

A first step in avoiding costly hassles with the IRS is identifying potential red flags before filing your business’s tax return. For example, a common source of audit conflict between the IRS and small businesses is the documentation of travel and entertainment expenses. The IRS often has the edge in these disputes because the tax law spells out detailed rules about how these expenses must be verified and documented. Most companies sincerely attempt to comply, but often fall short anyway. Fortunately, that is one problem for which some relief is available due to a wrinkle in the tax law that waives otherwise rigorous substantiation rules when a particular expense is below a certain minimum