| ?”-“ I also dont have any of the documents saved with my exspenses from that year so I'm not sure if I could even use any of them.”---->As you can see, your Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business is operated to make a profit. To be deductible, a business expense must be both ordinary and necessary. Receipts, statements and other pertinent documents help to identify income sources, track expenses, and track the cost and basis for properties or etc. They also make it easier to prepare your tax returns, while providing supporting documentation and proof if the IRS questions certain deductions. Receipts and records provide evidence for expenses you paid or claim for deductions and credit. Receipts support the amounts shown on the tax return; the IRS will allow reasonable estimates for business deductions without proof, substantiation ;It only works if records were lost due to circumstances beyond taxpayer's control e.g. fire, flood, etc. Cohan rule dealt specifically with allowing taxpayers to estimate certain deductible expenses when a taxpayer doesn't have the records to document the expenses. However, the Cohan rule is applicable only if the taxpayer can prove that they are entitled to the deduction, but it does not apply to travel, entertainment, and business gift expenses.However, you may go to ask for receipts and invoices from everyone you paid. If youcouldn’t get receipts, then signed affidavits from your recipients are needed. You may try to recreate workpapers showing the timing of receipts and payments. You may show how money was combined and transferred helps. Showing proof that it would be impossible to complete the work without incurring the expenses on the return based on the nature of the business. I guess you need to get some professional help from a tax practitioner. The you can determine if you’d file amended return or pay the back taxes.
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