GOING FOR THE RECORDS

Physician's Money Digest, March15 2003, Volume 10, Issue 5

Tip:

If you're ever faced with an IRSaudit, the records that prove yourdeductions to be legitimate may belong gone, especially if the auditcomes years after the return wasfiled. You can still pass muster withan auditor using secondary proofslike credit card statements that backup claims for business expenses,even though you may not havereceipts. Charitable gifts of morethan $250 require a receipt—if youno longer have it, a photocopy fromthe charity's files will probably dothe job. A diary can help confirm adeductible business trip. Auditorswill most likely accept these secondaryproofs, if it doesn't appearthat you're deliberately trying toplay games with the tax system. To avoid this problem, keep allrecords that justify your deductionsfor at least 3 years.