Proper recordkeeping and substantiation are the foundation of defensible tax deductions. While IRC §162 allows deductions for ordinary and necessary business expenses, taxpayers bear the burden of proving that those expenses meet strict substantiation requirements. Failure to maintain adequate records can result in denied deductions, penalties, and interest—often turning an otherwise valid expense into a costly audit issue. This course provides tax and accounting professionals with a practical framework for understanding the burden of proof and substantiation requirements applicable to business expenses.
Led by Susan Harper, Certified Fraud Examiner and retired IRS Internal Revenue Agent, this course examines recordkeeping requirements under IRC §§162 and 274, the concept of burden of proof, and the types of documentation the IRS expects to see during an examination. Participants will learn how to properly record business transactions, determine appropriate record retention periods, and design effective recordkeeping systems. The course also addresses the consequences of failing to substantiate deductions—including denied expenses, penalties, and interest—reinforced through practical examples and real-world case studies.
Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2029 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
Publication Date: September 2026
Designed For
This course is designed for professionals who prepare, review, or advise on business tax returns and want to strengthen audit defense and compliance practices.
Topics Covered
- Recordkeeping requirements for business expenses
- IRC §162 and IRC §274 substantiation rules
- Burden of proof in IRS examinations
- Substantiation standards and documentation
- Recording and tracking business transactions
- Record retention timelines
- Examples of effective recordkeeping systems
- Consequences of failing to substantiate deductions
- IRS tools and guidance for recordkeeping
Learning Objectives
- Explain why taxpayers are required to maintain records for business expense deductions
- Identify the types of records necessary to substantiate business expenses
- Apply the concept of burden of proof to business expense deductions
- Differentiate general substantiation requirements from heightened requirements under IRC §274
- Implement effective methods for recording business transactions
- Determine appropriate record retention periods for tax purposes
- Identify how to assess the consequences of inadequate substantiation, including penalties and denied deductions
- List IRS resources that support proper recordkeeping and substantiation
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
Susan Harper
Susan Harper, CFE, is a veteran tax authority, credentialed Certified Fraud Examiner, and educator who dedicated nearly four decades to federal tax administration and compliance. She began her distinguished career with the Internal Revenue Service (IRS) in 1988 as an Internal Revenue Agent. Over the next 37 years, she became a foundational figure in the agency's specialized enforcement and technical analytics initiatives.
In 2002, Ms. Harper was selected to join the IRS’s very first Abusive Tax Avoidance Transaction group spearheading complex investigations into high-level tax evasion schemes. Building on this specialized background, she transitioned in 2008 to the Office of Fraud Enforcement, serving for 13 years as a Fraud Technical Advisor. In this critical role, she leveraged her forensic expertise to provide advanced technical guidance on high-risk, fraudulent tax compliance issues nationwide.
Driven by a passion for innovation, Ms. Harper joined the Research, Applied Analytics, & Statistics (RAAS) division in 2021 to continue developing a cutting-edge strategic research tool for frontline compliance employees. Her technical prowess and strategic vision quickly elevated her to the role of Technical Advisor to the Chief of RAAS, and ultimately, Technical Advisor to the IRS’s Chief Operating Officer.
Ms. Harper officially retired from federal service in September 2025, leaving behind a legacy of innovation and enhanced financial enforcement.
Beyond her investigative and strategic achievements, Ms. Harper is a deeply committed educator. Since 2000, she has been sharing her vast knowledge by instructing federal income tax seminars and, more recently, interactive webinars. She thrives on the dynamic interaction with her students and looks forward to shaping the next generation of tax and fraud professionals through teaching for many years to come.