What happens if I get audited and don't have receipts?


Editorial team Published on

If you get audited and do not have receipts, the IRS can disallow your deductions, leading to back taxes, interest, and penalties. However, losing receipts does not automatically mean you lose every claim.

Alternative Proof You Can Use

  • Bank and credit card statements: Show the date, amount, and vendor name.
  • Invoices and canceled checks: Prove that a transaction occurred.
  • Digital records: Use emails, text messages, calendar entries, or vendor records to show a business purpose.
  • Reconstructed logs: Rebuild mileage or travel logs using mapping histories and digital calendars.
  • The Cohan Rule: A legal principle that allows reasonable estimates for certain business expenses if you can provide supporting factual context.

Consequences of Missing Receipts

  • Disallowed deductions: Expenses without any backup proof are rejected.
  • Increased tax bill: Your taxable income goes up when deductions are removed.
  • Penalties and interest: You will owe interest and potentially a 20% accuracy-related penalty.
  • Never fake records: Creating fake receipts turns a civil tax adjustment into a criminal fraud investigation.