Ok, when you think you have seen it all, here comes another.
Proof of Payment/Receipts
Receipts
When receipts are available, no other proofs of payment are required. A receipt is any document that contains the following five IRS-required elements and the information must be legible:
1. Name of vendor (person or company you paid)
2. Transaction date (when you paid)
3. Detailed description of goods or services purchased (what you bought)
4. Amount paid
5. Form of payment (how you paid – cash, check, or last four digits of credit card)
Proofs of payment
Provide a proof of payment only if no receipt is available. Proof is needed only when a receipt has been lost or was not provided by the merchant and there is no other way to demonstrate that you incurred a business-related expense.
- Cleared check
- Credit card statement
For REO reimbursements to be considered valid, you will also need a receipt or proof of payment outlining the information above or proof of payment. It is not recommended or suggested that you pay any vendor in cash if you are unable to received a receipt listing the five items above. Cash in this manner is not traceable and this process will delay your reimbursement. I recommend/suggest that you use a money order or certified check.
Proof of Payment Short Cuts to AVOID!
Several approach is being used to get around the proof of payment and ignorance is no excuse.
- If you pay online using the online bill payment system, you cannot write and submit a check that has not be used as the legal method of paying the vendor (See Dud Check below). You must submit the online payment confirmation receipt. Remember to always include the vendor invoice number and the property address in the memo section when processing online.
- Vague confirmation page – When you pay a utility bill online, some companies will give you a quick message along with a confirmation number. This cannot be used as proof of payment or as a receipt. It does not meet the five IRS requirements above.
- Dud Checks – Dud checks refers to making a copy of one check, removing the check number from the top right and reusing a copy of the Dud check over and over again as proof of payment when submitting reimbursements. A Dud check has not been legally tendered….CANNOT BE CASHED. Therefore, it is not a legal form of Proof.
Cash – While cash is a legal method of payment, YOU CANNOT MAKE COPIES OF THE CASH AND SUBMT THE COPIES AS PROOF OF PAYMENT. Not only did you break a federal law by copying currency but you are most likely transmitting the copies over state line. If you are paying via cash, the vendor is required to provide a receipt meeting the five IRS items above.
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