The legality of electronic receipts

Zhenya Grinshteyn —  March 2, 2010 — 11 Comments

We’ve had several people asking us whether scanned, photographed or otherwise electronic receipts are legal and accepted by the IRS for tax purposes. We did some digging and found the answer to share with everyone.

The short answer is YES, electronic receipts are legal and accepted by the IRS for tax and audit purposes as long as they can be accessed reliably, in case of an audit, and are legible (irs.gov). A short list of acceptable electronic documents are scanned or photographed images of original receipts, credit card receipts, and credit card statements that show the amount, date of payment, and the vendor or merchant.

A sample of an IRS accepted Expensify eReceipt

I'm valid!

If you’re into legalese, the two articles dealing directly with the legality of electronic receipts for tax purposes are IRS Publication 552 and even more information about electronic receipts can be found starting on page 9 of IRS Revenue Procedure 97-22 (PDF).

Please note that we can not give out tax advice, so check with your tax agent or attorney.

11 responses to The legality of electronic receipts

  1. 

    If Credit Card statements are allowed, then, can I assume that bank statements when using a debit card are acceptable as well? Thanks for the info.

  2. 
    Zhenya Grinshteyn April 26, 2010 at 4:13 pm

    Yep, we support a wide range of banks. The full list of the banks we support for importing expenses can be found here: https://www.expensify.com/content/help/import-expenses#banks

  3. 

    Scanned receipts may be legal, but a “receipt” must also show what was purchased. The ones that come in with the credit card charge in Expensify simply show that a charge was made. This is no different than looking at the statement for “proof.”
    This is OK for things like Taxi’s, but not for other purchases. For instance, if you buy something online, we should attach the invoice or bill that shows exactly what was purchased.

  4. 

    I have few receipts that are not printed, they are handwritten. Does IRS accept this type or receipt if I scanned it and uploaded to expensify.com when our company is being audited?
    Thank you

  5. 

    Hey Yon!

    An image of the handwritten receipt should satisfy the IRS as well as the actual receipt. I can’t say 100% whether these particular receipts are acceptable because I haven’t seen the actual receipts, but in general this should hold true.

  6. 

    I don’t know guys. Has this been taken to court?

    I was just reading http://www.irs.gov/pub/irs-irbs/irb97-13.pdf (page 10)
    and it says that the electronic storage system must:

    have reasonable controls to prevent and detect the unauthorized creation of, addition to, alteration of, deletion of, or deterioration of electronically stored books and records

    Typical photo software on your phone doesn’t have these checks.

    It seems that you have to use a “certfified” third-party software explicitly designed to make digitial copies in order to be safe from the IRS rules.

  7. 

    Hey there!

    Looks like there might be some confusion. I believe you are implying that because a photo does not verify if the receipt is legitimate it does not satisfy this section. This is not the case. A photo of a receipt can be altered in the same way that an actual receipt could be altered and submitted. Unfortunately, that is the way of the world. To combat this, we allow users to import their credit cards and bank transactions to verify that the purchases actually happened.

    Once an image of a receipt is taken, it is uploaded to access-controlled cloud storage, via a system with extensive logging for security and audit purposes.

    Fear not, with our e-receipts you are within the guidelines of the law. For more information check out: http://help.expensify.com/ereceipts

  8. 

    No that’s not what I was saying. On closer look there are two things:

    1. For submitting your taxes, electronic copies are fine. However, don’t destroy your originals just yet because….
    2. For auditing, you need “certified” third-party software (like Expensify) to store digitial copies. Typical photo software doesn’t cut it.

    In other words, unless you are using software like Expensify, you’ll still need the original hardcopies.

    Sucks for me. Good business for you :-)

  9. 

    Hey there! Genius scan is already able to export to Expensify. Could you email ryan at expensify dot com with some more details on what additional functionality you would like?

    We’d love some clarity around your specific use-case. Thanks!

Trackbacks and Pingbacks:

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