Key Takeaways

• Taxpayers still have rights even without receipts.
• The IRS allows reasonable expense approximation.
• Industry data can be used to reconstruct deductions.

You Still Have Options

If you’re in an audit and lack documentation, don’t panic. Courts have recognized that taxpayers may use reasonable methods to approximate expenses.

Real Example

One client owned a parts store but lost all records in a flood. The IRS initially disallowed most of his deductions, creating an $80,000 tax bill. By applying industry averages from local competitors, we reconstructed his cost of goods sold. The IRS accepted 100% of his deductions.

Why This Works

As long as the approach is reasonable and backed by data, the IRS allows approximation. The key is knowing the rules and presenting the case properly.

Next Step

Don’t face an audit alone. Book your free consultation today and let us protect your rights.

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