Don't assume the IRS is stupid . . .

Many taxpayers don't keep a car log. When asked for one by the IRS they spend the night reconstructing a diary from two or three years earlier. Unless you're real careful, chances are you'll get caught. The IRS has cross referenced dates to other records. In one case the IRS showed that the taxpayer took a plane trip the same day he claimed he used his car to travel the 250 miles to the same destination. That, plus a few other discrepancies convinced the Tax Court to throw out the entire log. Other instances where the IRS got the better of the taxpayer:

• The IRS called a manager of a major paper company who testified the pad used by the taxpayer wasn't on the market until two years after she claimed to have recorded the information.
• The Court found that receipts had been clumsily altered to change the dollar amounts of purchases.
• The IRS has called a handwriting expert to testify receipts were written by the taxpayer.
• The Court found receipts had been totally fabricated based on gross discrepancies in the documents.
• The IRS showed that the ink was no more than a year old, but the taxpayer claimed to have recorded the entries three years earlier.
• Receipts presented to the court as evidence didn't match the description of the expenses deducted.