Dear Stephen,
The short answer is that while original receipts are always preferable
in preparing business expense reports, and while the burden is on you
to justify the expenses that you are deducting, an original receipt is
not a strict necessity for any item of expense. A photocopy or
"electronic copy" will be sufficient but may need to be supplemented
by amplifying information.
Travel, Entertainment, Gift and Car Expenses are discussed in 48 pages
of detail in IRS Publication 463. This Publication can be downloaded
or browsed at http://www.irs.gov/pub/irs-pdf/p463.pdf (you will need
Adobe Acrobat to read this. If you need Adobe Acrobat, it can be
downloaded for free at:
http://www.adobe.com/products/acrobat/readstep2.html )
In IRS PUB 463, please look at Chapter 5, which begins on page 23.
This chapter is entitled “Recordkeeping” and it lays out a lot of
information, for example:
Documentary evidence. You generally must have documentary evidence,
such as receipts canceled checks, or bills, to support your expenses
Documentary evidence is not needed if any of the following conditions
apply:
1) You have meals or lodging expenses while traveling away from home
for which you account to your employer under an accountable plan, and
you use a per diem allowance method that includes meals and/or
lodging.
2) Your expense, other than lodging, is less than $75.
3) You have a transportation expense for which a receipt is not
readily available.
Adequate evidence. Documentary evidence ordinarily will be considered
adequate if it shows the amount, date, place, and essential character
of the expense.
For example, a hotel receipt is enough to support expenses for
business travel if it has all the following information.
1) The name and location of the hotel.
2) The dates you stayed there
3) Separate amounts for charges such as lodging, meals, and telephone
calls.
A restaurant receipt is enough to prove an expense for a business meal
if it has all of the following information
1) The name and location of the restaurant.
2) The number of people served.
3) The date and amount of the expense.
If a charge is made for items other than food and beverages, the
receipt must show that this is the case.
Canceled 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.
You must keep receipts for 3 years from the date your tax return was
filed. See Pub 463, page 25.
See the discussion entitled “What if I have incomplete records?” at
page 24.
Again, the IRS PUB 463 can be found at
http://www.irs.gov/pub/irs-pdf/p463.pdf
I hope that this is a complete answer to your excellent question. If
for any reason you require amplifying information, before you rate the
question please ask for clarification and I will provide the
additional information as soon as practicable.
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