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Tax.appeal.168, Tax Accountant
Category: Tax
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Experience:  3+ decades of varied tax industry exp. Tax Biz owner
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We have had a horse farm with appropriate forms, sent with

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We have had a horse farm with appropriate forms, sent with our tax returns, since 1997.
This year they asked for "supporting information" to substantiate each item listed in our farm's expense form. We have all of that, either via receipts or proof of payment via checks and/or Paypal payments.
My question has to do with the fact that we have become careless in using only our farm checking account to pay for all farm expenses.
My husband wants to send in copies of the checks, which would be from the farm account and our personal account, but I only want to submit the "supporting information", such as the check number, date, whom paid and the amount paid.
I am concerned that sending copies of the checks, which would be "supporting documents" (not asked for), would provide proof of the use of personal funds to pay farm bills. BTW, the farm is not incorporated, just a simple Sole Proprietorship.
Should we send in just the check details for each payment, or send copies of each check, thus revealing that we haven't kept our farm and personal accounts separate?
Thank you
Welcome. THANK YOU for choosing Just Answer. My name is XXXXX XXXXX my goal is to help make YOUR life, a little...LESS taxing.

From my experience, when the IRS requests "supporting documentation", they usually want to see copies of checks, bank statements, or paid invoices. Simply typing up a list with the amount and the check number will not suffice. I note that you seem to be concerned about the fact that you have been paying bills for the farm with personal funds. While the IRS would prefer that taxpayers who have businesses, farms, etc., not intermingle funds, there is no penalty or ramifications for doing so. It doesn't matter if you paid the expenses from the farm banking account or the personal account, as long as you can prove that it was a reasonable and necessary expense for the farm, you should be ok. I understand not wanting to give the IRS too much information, but in this case, if you don't submit appropriate supporting documentation, it is likely that the expenses will be denied, and you may end up owing a large tax bill.

Please let me know if I can be of further assistance to you regarding this matter.

Thank you again for using JUST ANSWER.
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Customer: replied 3 years ago.

Thank for that clearly explained answer. You were able to understand my core concern and address it fully. I am grateful.


You are very welcome. Thank you for the positive rating and the generous bonus. I appreciate it. If the customers take the time to clearly articulate what it is that they need, like you did, we can provide a more concise answer the first time that we respond, which saves time for both the customer and the expert. Feel free to check back with me in the future if you have other tax related questions. Even if prompted to do so, there is no need to respond to this post. Enjoy the evening.

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