I just received my bank statement recently from a well-known, locally based, Crystal Lake bank. Much to my surprise the statement did not contain the images of checks I am so used to seeing. Why do I care? Well, in the event of an IRS audit, I need to have proof of my business deductions. In my recent post “What Happens in an IRS Audit?” I explain the importance of having proof of payment as one part of the evidence the IRS needs for substantiation of deductible expenses. The other part is an invoice that shows what you purchased.
So I called the bank and it was explained to me, quite surprisingly, that it was an industry-wide change, you just have to accept it and (get this) “the IRS will just have to adapt.” The IRS will have to adapt? Obviously this lady has never suffered through an IRS audit. Furthermore, she suggested that since the images of the checks are stored online for 3 whole months, I could just download them, one by one, and store them on my computer.
It is really hard for me to believe that a bank would consider not providing cancelled check images on their statements as good customer service.
So, watch your bank statements and make sure they don’t just stop providing images of cancelled checks. Because in the event you need them for a grumpy IRS auditor, you will need them!
Steve Trojan, CPA is owner of SMT & Associates, Inc. (www.smt-associates.com), a Crystal Lake IL based tax and accounting firm. He specializes in tax and accounting issues affecting small business owners, as well as individuals with IRS and Illinois tax problems. For more posts about IRS problem resolution, see our website www.illinoistaxhelp.com.
Credit (WOTC) for hiring unemployed veterans. This effectively gave a one-year lease on life to the WOTC, but only with respect to qualified veterans who begin work for the employer before January 1, 2013. For all other classifications, the credit ended at the close of 2011.
PDF 
