In this video, Tax Attorney John Hyre walks through a practical, no-fluff approach to recording your Augusta Rule events. Not overkill. Not guesswork. Just what’s needed to keep everything clean, compliant, and CPA-ready.
You’ll learn:
What to document for each meeting
How to keep it simple with signs, agendas, photos, and time tracking
Why contemporaneous records matter
How to delegate some of the process to your team
And how our system makes it almost automatic
This is the part most business owners skip, until it costs them. Don’t let that be you.
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we’re audited, we win? Because if it’s
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not written, it didn’t happen. And I
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have to strike a balance. I want you to
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win. That means you are going to have to
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do some recording of what occurred. I
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know you don’t want to. I know you’d
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rather this be absolutely effortless.
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We’re going to minimize the effort. And
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there’s a line somewhere. I could give
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you my perfect list of what the tax
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lawyer would want in court, and it would
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be longer than you’d be willing to do.
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So, I’m going to give you a list that I
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think is reasonable with a few extra
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optional items. We are going to need
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some of this and our app makes it a lot
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easier. I can’t emphasize enough how
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important it is to do it
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contemporaneously. Upload it to the app,
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get it over with, do it once, do it
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right, be done. If you must, delegate
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it. Have an admin do some of these
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things. Not all of it has to be done by
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you. It’s not that much to ask, but we
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need something so that if there were to
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be an audit, we would win. What are some
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things we need to see? A rental
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agreement. And thankfully, we’ve come up
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with a pretty good one. We spent some
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time looking at how this works in the
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industry. What’s in a rental agreement?
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We made a balance between perfection,
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which sadly we had to avoid. I wanted
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perfection. I wanted a much larger
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agreement than we got. But I know if
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it’s too much, you won’t do it. So, we
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went with an agreement that’s
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reasonable, but not perfect. We need a
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description of the purpose whether it’s
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going to be an annual meeting, an
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employee meeting, fundraising meeting,
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networking with fellow professionals to
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learn whatever it is. And then proof of
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that purpose. For example, if you have
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an annual meeting, notes for the annual
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meeting would be very helpful. And
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immediately have those done. Immediately
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have those uploaded. We’ve got the
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proof. We’re done. We don’t have to
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think about it. Um, we need the
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duration. Track the time. Just make a
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little note. What time did we start?
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What time did we finish? You’ve got
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plenty of people there who can attest to
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that time. We need signs for excluded
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areas, particularly your home office.
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That’s the really important one. If you
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don’t do it, it’s not fatal. I prefer
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you do it. So, if you have a home
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office, have a nice little sign you use
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every time. You put it on the door and
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it says excluded area. Why? Because if
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you let someone into that home office to
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use it, you might blow your home office
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deduction. We don’t want that. So, you
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put a sign on the door. Better yet, you
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take a quick picture or have your admin
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take a quick picture of that sign. You
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upload it. There might be other excluded
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areas. Bedrooms come to mind. Other
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areas where you don’t want people going.
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Just put up a sign that you save for all
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the meetings and every time you’d have
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you or your admin or a helper take a
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picture. This is a narrative. It all
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adds up. Do you have to do the photos?
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No. Do I think it’s better if you take
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the extra I don’t know. 2 minutes for
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you or someone else to do it? Yes. It’s
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much better documentation. It’s a better
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narrative. It gives me something to work
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with in an audit. It makes you the
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person they don’t want to go after. We
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hope none of this makes it to tax court.
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But if it does, something to know. Out
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of 20 cases that go to tax court, 19
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settle, one goes to court. Which one?
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The slam dunk. Don’t be the slam dunk.
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Get me the documentation. Be one of the
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ones that it just settles out. Usually
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very much in your favor. So take the
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pictures of the business sign. If you
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handed out brochures or you had
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advertising, you had terms of financing,
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maybe there was an agenda. You have a
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meeting where you’re educating or
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discussing, there’s a printed agenda. We
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just basically want you to record what
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happened contemporaneously, upload it to
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the app so it’s in one place, and that
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way if push ever does come to shove,
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we’re ready. By the way, this is a good
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habit for all tax things. Once we see
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that you’re in the habit of this, and
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granted we make it easier through our
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app, this is not a bad thing to do with
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all tax deductions in general. It’s a
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good habit to build.
