substantiation
Definition
Substantiation means having real proof to back up a claim you make about your business, your products, or your expenses. If you tell customers your product does something specific, or if you write off a business expense on your taxes, you need documentation that supports that claim before you make it.
Example
If you advertise that your supplement helps people lose 10 pounds in a month, the FTC expects you to have scientific evidence proving that claim before you run the ad, not after someone complains.
Watch Out
The IRS and the FTC both take substantiation seriously, so keeping organized records and receipts from day one can save you from major fines or disallowed deductions later.
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This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.