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The Documentation of Business Entertainment Deductions

The five things you need to record to avoid an audit
April 22, 2003
URL: http://www.entrepreneur.com/article/61296

According to tax expert and former IRS attorney Sandy Botkin, you don't need receipts for entertainment if it's under $75 per expense. But when you do entertain, the IRS requires certain documentation. So with entertainment, you have to write down what I call the four Ws and an H:

If you write down all five things, you'll never have to worry about an IRS audit again. If you leave out any one of the five, your deductions will be disallowed and the IRS will hit you with a 75 percent penalty, plus Interest.

Source: "Tax Expert Sandy Botkin"