If you are a business owner with business expenses, you must keep accurate records of your business income and business expenses in order to claim them on your tax returns.
In a recent case before the United States Tax Court, the IRS alleged that deductions claimed by a taxpayer should be disallowed because he was unable to substantiate the expenses in question, and the United States Tax Court agreed. The Tax Court disallowed the taxpayer’s business expenses and declined the taxpayer’s request that the Tax Court provide a reasonable amount of expenses to him for each year. The Tax Court also found that the taxpayer presented fictitious documents to the court and that his story was implausible.
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