Accounting Articles > IRS Audit:
What if I don't have all of my source documents?
You can always get a copy of bank statements, canceled checks, and deposit tickets from the bank. It may be quite expensive, but it is possible. You can even get copies of your old tax returns from The Internal Revenue Service.
Proper documentation can be a real pain, but it is your only salvation in the event of an audit. Getting a copy of source documents after the fact may or may not be possible. If you don't have all of your source documents, it's a strong indication that your accountants aren't taking your needs seriously. This should never have been allowed.
Inventory, if you have one, can be a real problem. If they are auditing the income tax return from 3 years ago, and you haven't documented your inventory properly, what can you possibly do?
What about your Sales? If you haven't kept copies of all your invoices, register receipts, and/or sales journals, how can you prove that your sales weren't actually twice the stated amount?
What about Expense? If you didn't keep copies of your receipts, and the vendor is still in business, you may still be able to get a copy. But what if they're out of business? Many times, a canceled check is not enough to prove the claim. All relevant deductions can be disallowed, resulting in additional tax, interest and penalty.
In today's electronic world, we don't always get invoices and proper documentation. But tax law is primarily about intent. If we can prove that you kept all the documentation that you received, it will generally go a very long way towards proving that there was no intent, and therefore no culpability.
If you don't
have your documentation, you'd better go find it — or decent representation.
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