Accounting Articles > IRS Audit:

What if I don't have all of my source documents?

You should have changed accountants a long time ago, because this never should have been allowed.

Proper documentation can be a real pain, but it is your only salvation in the event of an audit. Getting a copy of many of the source documents years after the fact may, or may not be impossible. 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.

Inventory, if you have one, can be a problem. If they are auditing an income tax return from three years ago, and you haven't documented you inventory properly, what are you going to do now?

What about your Sales? If you didn't keep copies of all of your invoices, register receipts, and/or sales journals how are you going to prove that your sales weren't actually twice what they were?

What about the expense side of your return? 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. What if they're out of business. Many times a canceled check is not enough to prove the claim. All of those deductions could be disallowed resulting in additional tax, interest, and penalty.

If you are asking this question in the first place, then its probably time for you to change accountants. There is no need for you to try to represent yourself, or to continue being represented by a bad accountant. Call our offices today. The Standard Accounting Packages section of our website, may have exactly what you need. We will review your case and provide a second opinion for as little as $500, or represent you starting at $1,500. As highly recommended tax accountants practicing in Chicago, we have the experience to help you and your company. Call or e-mail us today.