Taking Control of T
Travel and entertainment costs are likely targets during any IRS audit. To cure T&E tax troubles, James A. Firestone, executive vice-president at American Express, recommends:
* Eliminating cash outlays. Require employees to record on original charge receipts who they're entertaining and why, so you'll have extra documentation when credit-card issuers send you monthly receipt facsimiles.
* Verifying T&E tax records against quarterly statements. This should help the company pick up tax-deductible charges employees may have forgotten about, as well as incorrectly filed expense charges.
* Requiring receipts for all expenses over $10. Setting a receipt minimum lower than the $25 that is required by the IRS will beef up your company's documentation during tax audits. -- Jill Andresky Fraser