Keeping Records
What are adequate records?
You should keep the proof you need in an account book, diary, statement of expense, or similar record. You should also keep documentary evidence that, together with you each record, will support each element of an expense. You generally must have documentary evidence, such as receipts, invoices, or bills, to support your expenses along with your cancelled check.
A canceled check, together with a bill from the payee, ordinarily establishes the cost. However, a canceled check by itself does not prove a business expense without other evidence to show that it was for a business purpose.
What if I have incomplete records?
Your own written or oral statement containing specific information about the element of expense and other supporting evidence is sufficient to establish the element.
Sampling can be used
You must demonstrate by other evidence that the periods for which an adequate record is kept are representative of the use throughout the tax year.
Exceptional circumstances
Special rules apply if, because, of the nature of the situation in which an expense is made, you cannot get a receipt.
Destroyed records
Special rules apply if, you cannot produce a receipt because of reasons beyond your control, include hurricane, fire, flood, and other casualty.
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