What to Do if You’re Being Audited without Your Receipts

There is nothing worse than being audited by the IRS and not having receipts. Not having your receipts can leave you in hot water simply because you have no documentation that backs up the amount of income you have in your bank. While it can be frightening, it’s important that you document every single expense or deduction you have prior to filing in order to minimize the probability of an audit. So what do you do if you are being audited and have no receipts?

Don’t Panic

The worst thing you can do during an audit is panic; everyone knows that panicking has never solved any problems. The moment you start to panic, the moment you’ll start making more mistakes, and making mistakes is probably what led you to the audit to begin with.

Make a Mental Note to Start Keeping Your Records

While it may not help you with this particular tax audit, make a mental note to start keeping your records for everything moving forward. Sometimes the best teacher is experience, so learn from this mistake.

Don’t Make Up Receipts

Whatever you do, don’t attempt to create your own receipts fraudulently. You may be able to fool people for a little while, but you won’t be able to keep it up for very long.

Don’t Lie

When you tell the truth, you never have to remember what you said, and for that reason alone you should always be truthful. While this could leave you in hot water with the IRS, lying about records you don’t have could have you in even hotter water, so it’s best to be up front and honest about your current documentation or lack thereof.

Hire a CPA

Hiring a CPA can be your best decision, especially when you are faced with an IRS audit. Many CPAs have had years of experience with the IRS and can help you navigate the process more efficiently.

Have you recently found yourself in an IRS audit without having receipts? Leave your comments below.

Image credit: Brad Montgomery