No “business purpose” documentation equals no expense deduction

So have you collected the right justification for all those travel or meals and entertainment receipts?

Many court cases are showing how a new IRS approach is denying otherwise well-documented tax deductions. One attorney deducted travel on his IRS Schedule C, provided amounts, times, places, mileage, parking, locations of meetings; submitted receipts, bank statements, and a copy of a calendar that included names, times, and locations. But, under IRC §274, Disallowance of certain entertainment, etc., expenses, this was not quite enough. ​The court ruled that the documentation was not sufficient for it to determine the business purpose of the travel or even if there was a business purpose. ​

Read on to find out what the court really wanted to see as justification of those travel expenses, and for a quick checklist to use before sending receipts to your bookkeeper. 

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