I have been audited multiple times over the past 10 years. Most recently in 2017. I can tell you for a fact that the IRS demands 2 forms of support for EVERY expense on a Schedule C. They want BOTH the original invoice / receipt AND the proof of payment document. So an invoice and a cancelled check, for example. ANYTHING else can be denied. Actually anything can be denied - because I provide accounting and tax services for my clients and I have an online subscription to the Wall Street Journal to keep up on business and finance news that may relate to my clients. I had both downloaded invoices from the WSJ and my credit card payment documentation - so both forms of support for my business expense. But the IRS DENIED this expense - because I was not a stock investor. So the IRS can do anything they want to do. Keep ALL your paperwork, document everything, and you still can lose. But that is what happens when the IRS legally operates under a rule of law that states that YOU are guilty until you can prove your innocence (Napoleonic code) - and there is little to no recourse for a small business person who cannot afford to go to tax court to fight them.
