What should I do if I lost a receipt for a business expense?

Does a missing receipt decide whether the expense goes in the books?

No. A lost receipt raises two questions, and it threatens only the second.

The first is whether the expense is recorded. IRS Publication 583 says your books must show your gross income, as well as your deductions and credits, and warns that you may forget expenses when you prepare your tax return unless you record them when they occur. If money left a business account for a real business purchase, that transaction happened. Dropping it understates your costs, leaves the payment unexplained in the accounts and discards an expense you might still support.

The second is whether you can support it if it is questioned. Publication 583 says supporting documents support the entries in your books and on your tax return, and that if the IRS examines any of your returns you may be asked to explain the items reported. That is what a lost receipt puts at risk.

This applies to a purchase you know was made. A card or bank charge that nobody in the business recognizes is a different problem: raise it with the card issuer or bank straight away instead of reconstructing it.

Where can a replacement copy still come from?

A copy from the source is stronger than anything you write yourself, so try these routes before treating the expense as undocumented:

• The seller. Ask for a duplicate receipt or a copy of the invoice, giving the date, the amount and the last four digits of the card used. Stripe's receipts documentation (undated) says a business can send email receipts manually from its Stripe Dashboard for a successful payment, so a seller that takes payment through Stripe has a way to resend one.
• Your email and online accounts. Search your inbox for the order or payment confirmation, and check the order history in your account with the seller.
• A processor receipt link you were sent. Stripe's documentation also says customers can view their receipts online and optionally download them as PDFs, and that if a receipt link has expired, Stripe asks for the email address used for the original transaction and sends a new link to it. This applies only where the seller took payment through Stripe and you were sent its receipt or link.
• Subscription and platform billing. Check the service's billing area. Microsoft's help page on Microsoft 365 invoices, for example, says Microsoft 365 services don't provide payment receipts, that invoices for its business subscriptions can be viewed or downloaded in the Microsoft 365 admin center by someone who is at least a Billing Administrator, and that for card payments you use the invoice and your card billing statement to match the payment.

Note each attempt, with its date and result, for the reconstruction. If a copy turns up, attach it to the entry with a note that it is a duplicate and when you got it, and stop searching. If the expense is travel, a gift, a meal or transportation, still check the class's record elements below: Publication 463 says the receipt should, together with your own record, support each element. Your bank or card statement is not a replacement receipt: it belongs with the supporting evidence below.

What can back up the expense when no copy exists?

Publication 583 says the supporting documents for an expense should show the amount paid and that the amount was for a business expense. Each kind of secondary evidence covers only part of that. Publication 583 lists the documents that support an expense but gives no procedure for a lost receipt, so the table below is practical guidance on what each kind of evidence can and cannot show, not an IRS list of accepted evidence:

Publication 583 says you may be able to prove payment with certain financial account statements prepared by financial institutions, that these statements must be highly legible, and that for a credit card payment the statement must show the amount charged, the payee's name and the transaction date, with separate lists for checks and electronic transfers. It also warns that proof of payment of an amount, by itself, does not establish you are entitled to a tax deduction, and that you should also keep other documents, such as credit card sales slips and invoices, to show that you also incurred the cost. A statement line answers "did you pay?" and leaves "what, and why?" open.

If you paid cash, the first row is missing, so the seller's records, your business records and the reconstruction carry all the weight. Keeping records of cash purchases going forward is a separate question, as is when a receipt is required in the first place.

What should the written reconstruction record?

The reconstruction is a signed account of the purchase, written to sit beside the evidence. Whoever knows the facts, usually the person who made the purchase, should write and sign it. Title it as a reconstruction of a lost receipt, and give it these entries:

• Payee. Give the seller's name and location, matching the statement description if there is one.
• Date. Give the purchase date and the document it comes from.
• Amount and its basis. Give the figure and its source, such as "per business checking statement", or write "estimate" and how you reached it.
• What was acquired. Describe the goods or services, with quantities.
• Business purpose. Say why the business needed it, tied to a client, job or activity.
• Why the original is unavailable. Say what happened to it and list each replacement route you tried, with dates and results.
• Evidence attached. Name each supporting document.
• Who wrote it and when. Sign it and add the date you actually wrote it.

Write it as soon as you find the receipt is missing, and date it that day. Writing about travel, gift and transportation (including car use) records, IRS Publication 463 says you should record the elements of an expense at or near the time of the expense and support it with sufficient documentary evidence, and that a timely kept record has more value than a statement prepared later when there is generally a lack of accurate recall. Its true date is part of its credibility. Never give it the purchase date, never make it look like the seller's receipt, and never rewrite it: if better evidence appears later, add a dated note.

Does travel, a gift, a meal or transportation need more than this?

Yes. Publication 463 says that if you deduct travel, gift, or transportation expenses, you must be able to prove (substantiate) certain elements of expense, and its Table 5-1 lists, class by class, the details your records must show. Publication 463's class is transportation; car expenses are one part of it. For car expenses, for example, the table's amount column asks for the cost of the car and any improvements, the date you started using it for business, the mileage for each business use and the total miles for the year. Publication 463 says a restaurant receipt is enough to prove a business meal if it shows all of the following: the name and location of the restaurant, the number of people served, the date and amount of the expense, and, if the charge includes items other than food and beverages, that fact. A reconstruction written for a supply purchase covers none of those extra elements, so a lost fuel or restaurant receipt is one gap inside a larger record. Publication 463 also lists exceptions under which documentary evidence such as a receipt is not needed for some of these expenses, one of them depending on the size of the expense; they concern the receipt, not the record of each element. Whether one covers yours belongs to the related question on when a receipt is required.

For these classes, Publication 463 says that if you do not have complete records to prove an element of an expense, you must prove it with your own written or oral statement containing specific information about the element, and other supporting evidence that is sufficient to establish it. For the description of a gift, or the cost, time, place or date of an expense, that evidence must be direct evidence, such as written statements or the oral testimony of your guests or other witnesses setting forth detailed information about the element, or documentary evidence, such as receipts, paid bills or similar evidence. For the business relationship of your guests or the business purpose, it can be circumstantial.

Publication 463 separately lets you prove a deduction by reconstructing your records when you cannot produce a receipt because of reasons beyond your control, which it says include fire, flood and other casualties. Do not assume a receipt you simply misplaced qualifies; build the record to meet the incomplete-records rule instead. Rebuilding a whole period's records after a loss of that kind is a separate question.

What if you do not know the exact amount?

Keep an evidenced amount and an estimate apart. A figure taken from a statement line, a processor receipt or the seller's invoice is evidenced; name the document. If one card charge mixed business and personal items, the total is evidenced but the business share is not. If you paid cash and kept nothing, the amount itself is an estimate.

For travel, gift and transportation expenses, Publication 463 says you can't deduct amounts that you approximate or estimate. For any other expense, whether an estimated amount can be claimed is not a call to make in the books. If you record an estimate, label it as one in the reconstruction's amount line, in the entry memo and on your list of flagged entries, each time with how you reached it, and replace it with the evidenced figure, with a dated note, if a document turns up.

How should the entry look in the books?

Record the expense at the evidenced amount, or a labelled estimate, in the account it belongs to, and make its weaker support visible in four ways:

• Memo. State that the receipt was lost, the date of the reconstruction and where the amount comes from.
• Attachments. Attach the reconstruction and every piece of supporting evidence to the entry itself.
• Flag. Use a tag, class or fixed memo phrase such as "reconstructed support", so one report lists every such entry.
• List. Keep a running list of flagged entries, marking any that are estimates or fall in the travel, gift, meal or transportation (including car use) classes.

Do not park the expense in a suspense account or delete it while you wait for evidence.

What does one lost receipt look like before and after?

On March 14 a landscaping business paid 186.40 by business debit card at an irrigation supplier for pipe and fittings used on a client's sprinkler repair. On April 2, reviewing the bank feed, the owner finds the receipt is gone. The store is asked the same day and cannot find a copy; the purchase was in person, so there is no order history or receipt email.

Before, the ledger shows only this:

The owner writes this reconstruction on April 2:

After, the same bank transaction is recategorized to record:

Its memo reads "Receipt lost. Reconstruction dated Apr 2 attached; amount per bank statement", it carries the "reconstructed support" tag, the four documents are attached, and the entry is added to the running list of flagged entries. Because the purchase was paid when it was made, the entry is the same on the cash and accrual basis. Had the purchase been fuel for a car, the car's mileage record would also be needed.

When does claiming it become a question for a tax professional?

Recording the expense is bookkeeping; claiming it on a return is a filing decision, and a reconstruction does not make that decision for you. Use the flags to sort entries:

Hand the flagged list and the reconstructions to your preparer, not a bare total. Treasury's rules for tax practitioners, Circular 230 at 31 CFR 10.34, say a practitioner who prepares or signs a return generally may rely in good faith without verification upon information the client furnishes, but may not ignore the implications of information furnished to, or actually known by, the practitioner, and must make reasonable inquiries if it appears incorrect, inconsistent with an important fact or another factual assumption, or incomplete. A flagged entry lets them ask those questions before filing.

For a period already filed, the reconstruction supports an expense already claimed rather than a decision still to come. Build it the same way and date it the day you write it; whether the return itself should be revisited is a question for a tax professional, not one to settle in the books.