diff --git a/src/libs/ReportUtils.ts b/src/libs/ReportUtils.ts
index d9a7179de534..90571ffb883e 100644
--- a/src/libs/ReportUtils.ts
+++ b/src/libs/ReportUtils.ts
@@ -75,7 +75,6 @@ import type {NotificationPreference, Participants, Participant as ReportParticip
 import type {Message, OldDotReportAction, ReportActions} from '@src/types/onyx/ReportAction';
 import type {PendingChatMember} from '@src/types/onyx/ReportMetadata';
 import type {OnyxData} from '@src/types/onyx/Request';
-import type {SearchTransaction} from '@src/types/onyx/SearchResults';
 import type {Comment, TransactionChanges, WaypointCollection} from '@src/types/onyx/Transaction';
 import type {FileObject} from '@src/types/utils/Attachment';
 import {isEmptyObject} from '@src/types/utils/EmptyObject';
@@ -929,7 +928,7 @@ type GetReportNameParams = {
     parentReportActionParam?: OnyxInputOrEntry<ReportAction>;
     personalDetails?: Partial<PersonalDetailsList>;
     invoiceReceiverPolicy?: OnyxEntry<Policy>;
-    transactions?: SearchTransaction[];
+    transactions?: Transaction[];
     reports?: Report[];
     policies?: Policy[];
     isReportArchived?: boolean;
@@ -1918,9 +1917,11 @@ function isSelfDMOrSelfDMThread(report: OnyxEntry<Report>): boolean {
 /**
  * Returns true if the report is an expense report, a group policy, a self-DM, or the iouType is create, and the iouType is not split or invoice.
  */
-function shouldEnableNegative(report: OnyxEntry<Report>, policy?: OnyxEntry<Policy>, iouType?: string) {
+function shouldEnableNegative(report: OnyxEntry<Report>, policy?: OnyxEntry<Policy>, iouType?: string, participants?: Participant[]) {
     const isSelfDMReport = isSelfDMOrSelfDMThread(report);
-    const isFirstTimeCreatingReport = !report && !policy && iouType === CONST.IOU.TYPE.SUBMIT;
+
+    const isUserInRecipients = participants?.some((participant) => !participant.isSender && !participant.isPolicyExpenseChat && participant.accountID);
+    const isFirstTimeCreatingReport = !report && !policy && iouType === CONST.IOU.TYPE.SUBMIT && !isUserInRecipients;
 
     const isExpenseReportType = isExpenseReport(report);
     const isGroupPolicyType = isGroupPolicy(policy?.type ?? '');
@@ -2251,7 +2252,7 @@ function findLastAccessedReport(ignoreDomainRooms: boolean, openOnAdminRoom = fa
 /**
  * Whether the provided report has expenses
  */
-function hasExpenses(reportID?: string, transactions?: SearchTransaction[] | Array<OnyxEntry<Transaction>>): boolean {
+function hasExpenses(reportID?: string, transactions?: Array<OnyxEntry<Transaction>>): boolean {
     if (transactions) {
         return !!transactions?.find((transaction) => transaction?.reportID === reportID);
     }
@@ -2261,7 +2262,7 @@ function hasExpenses(reportID?: string, transactions?: SearchTransaction[] | Arr
 /**
  * Whether the provided report is a closed expense report with no expenses
  */
-function isClosedExpenseReportWithNoExpenses(report: OnyxEntry<Report>, transactions?: SearchTransaction[] | Array<OnyxEntry<Transaction>>): boolean {
+function isClosedExpenseReportWithNoExpenses(report: OnyxEntry<Report>, transactions?: Array<OnyxEntry<Transaction>>): boolean {
     if (!report?.statusNum || report.statusNum !== CONST.REPORT.STATUS_NUM.CLOSED || !isExpenseReport(report)) {
         return false;
     }
@@ -4484,7 +4485,7 @@ function canEditMoneyRequest(
     isChatReportArchived = false,
     report?: OnyxInputOrEntry<Report>,
     policy?: OnyxEntry<Policy>,
-    linkedTransaction?: OnyxEntry<Transaction> | SearchTransaction,
+    linkedTransaction?: OnyxEntry<Transaction>,
 ): boolean {
     const isDeleted = isDeletedAction(reportAction);
 
@@ -4626,7 +4627,7 @@ function canEditFieldOfMoneyRequest(
     isDeleteAction?: boolean,
     isChatReportArchived = false,
     outstandingReportsByPolicyID?: OutstandingReportsByPolicyIDDerivedValue,
-    linkedTransaction?: OnyxEntry<Transaction> | SearchTransaction,
+    linkedTransaction?: OnyxEntry<Transaction>,
     report?: OnyxInputOrEntry<Report>,
     policy?: OnyxEntry<Policy>,
 ): boolean {
@@ -4924,7 +4925,7 @@ function areAllRequestsBeingSmartScanned(iouReportID: string | undefined, report
  *
  * NOTE: This method is only meant to be used inside this action file. Do not export and use it elsewhere. Use useOnyx instead.
  */
-function getLinkedTransaction(reportAction: OnyxEntry<ReportAction | OptimisticIOUReportAction>, transactions?: SearchTransaction[]): OnyxEntry<Transaction> | SearchTransaction {
+function getLinkedTransaction(reportAction: OnyxEntry<ReportAction | OptimisticIOUReportAction>, transactions?: Transaction[]): OnyxEntry<Transaction> {
     let transactionID: string | undefined;
 
     if (isMoneyRequestAction(reportAction)) {
@@ -4979,7 +4980,7 @@ function getTransactionReportName({
     reports,
 }: {
     reportAction: OnyxEntry<ReportAction | OptimisticIOUReportAction>;
-    transactions?: SearchTransaction[];
+    transactions?: Transaction[];
     reports?: Report[];
 }): string {
     if (isReversedTransaction(reportAction)) {
@@ -5609,7 +5610,7 @@ function getReportName(
     personalDetails?: Partial<PersonalDetailsList>,
     invoiceReceiverPolicy?: OnyxEntry<Policy>,
     reportAttributes?: ReportAttributesDerivedValue['reports'],
-    transactions?: SearchTransaction[],
+    transactions?: Transaction[],
     isReportArchived?: boolean,
     reports?: Report[],
     policies?: Policy[],
@@ -8938,7 +8939,7 @@ function hasViolations(
     reportID: string | undefined,
     transactionViolations: OnyxCollection<TransactionViolation[]>,
     shouldShowInReview?: boolean,
-    reportTransactions?: SearchTransaction[],
+    reportTransactions?: Transaction[],
 ): boolean {
     const transactions = reportTransactions ?? getReportTransactions(reportID);
     return transactions.some((transaction) => hasViolation(transaction, transactionViolations, shouldShowInReview));
@@ -8951,7 +8952,7 @@ function hasWarningTypeViolations(
     reportID: string | undefined,
     transactionViolations: OnyxCollection<TransactionViolation[]>,
     shouldShowInReview?: boolean,
-    reportTransactions?: SearchTransaction[],
+    reportTransactions?: Transaction[],
 ): boolean {
     const transactions = reportTransactions ?? getReportTransactions(reportID);
     return transactions.some((transaction) => hasWarningTypeViolation(transaction, transactionViolations, shouldShowInReview));
@@ -8984,7 +8985,7 @@ function hasNoticeTypeViolations(
     reportID: string | undefined,
     transactionViolations: OnyxCollection<TransactionViolation[]>,
     shouldShowInReview?: boolean,
-    reportTransactions?: SearchTransaction[],
+    reportTransactions?: Transaction[],
 ): boolean {
     const transactions = reportTransactions ?? getReportTransactions(reportID);
     return transactions.some((transaction) => hasNoticeTypeViolation(transaction, transactionViolations, shouldShowInReview));
@@ -8993,7 +8994,7 @@ function hasNoticeTypeViolations(
 /**
  * Checks to see if a report contains any type of violation
  */
-function hasAnyViolations(reportID: string | undefined, transactionViolations: OnyxCollection<TransactionViolation[]>, reportTransactions?: SearchTransaction[]) {
+function hasAnyViolations(reportID: string | undefined, transactionViolations: OnyxCollection<TransactionViolation[]>, reportTransactions?: Transaction[]) {
     return (
         hasViolations(reportID, transactionViolations, undefined, reportTransactions) ||
         hasNoticeTypeViolations(reportID, transactionViolations, true, reportTransactions) ||
@@ -9017,12 +9018,12 @@ function shouldBlockSubmitDueToStrictPolicyRules(
     reportID: string | undefined,
     transactionViolations: OnyxCollection<TransactionViolation[]>,
     areStrictPolicyRulesEnabled: boolean,
-    reportTransactions?: Transaction[] | SearchTransaction[],
+    reportTransactions?: Transaction[],
 ) {
     if (!areStrictPolicyRulesEnabled) {
         return false;
     }
-    return hasAnyViolations(reportID, transactionViolations, reportTransactions as SearchTransaction[]);
+    return hasAnyViolations(reportID, transactionViolations, reportTransactions);
 }
 
 type ReportErrorsAndReportActionThatRequiresAttention = {
@@ -10375,7 +10376,7 @@ function getAllHeldTransactions(iouReportID?: string): Transaction[] {
 /**
  * Check if Report has any held expenses
  */
-function hasHeldExpenses(iouReportID?: string, allReportTransactions?: SearchTransaction[]): boolean {
+function hasHeldExpenses(iouReportID?: string, allReportTransactions?: Transaction[]): boolean {
     const iouReportTransactions = getReportTransactions(iouReportID);
     const transactions = allReportTransactions ?? iouReportTransactions;
     return transactions.some((transaction) => isOnHoldTransactionUtils(transaction));
@@ -10384,7 +10385,7 @@ function hasHeldExpenses(iouReportID?: string, allReportTransactions?: SearchTra
 /**
  * Check if all expenses in the Report are on hold
  */
-function hasOnlyHeldExpenses(iouReportID?: string, allReportTransactions?: SearchTransaction[]): boolean {
+function hasOnlyHeldExpenses(iouReportID?: string, allReportTransactions?: Transaction[]): boolean {
     const transactionsByIouReportID = getReportTransactions(iouReportID);
     const reportTransactions = allReportTransactions ?? transactionsByIouReportID;
     return reportTransactions.length > 0 && !reportTransactions.some((transaction) => !isOnHoldTransactionUtils(transaction));
diff --git a/src/pages/iou/request/step/IOURequestStepAmount.tsx b/src/pages/iou/request/step/IOURequestStepAmount.tsx
index e96640d0fa61..d6ff8ae34078 100644
--- a/src/pages/iou/request/step/IOURequestStepAmount.tsx
+++ b/src/pages/iou/request/step/IOURequestStepAmount.tsx
@@ -99,7 +99,7 @@ function IOURequestStepAmount({
     const isSubmitType = iouType === CONST.IOU.TYPE.SUBMIT;
     const isEditingSplitBill = isEditing && isSplitBill;
     const currentTransaction = isEditingSplitBill && !isEmptyObject(splitDraftTransaction) ? splitDraftTransaction : transaction;
-    const allowNegative = shouldEnableNegative(report, policy, iouType);
+    const allowNegative = shouldEnableNegative(report, policy, iouType, transaction?.participants);
     const disableOppositeConversion = isCreateAction || (isSubmitType && isSubmitAction);
     const {amount: transactionAmount} = getTransactionDetails(currentTransaction, undefined, undefined, allowNegative, disableOppositeConversion) ?? {amount: 0};
     const {currency: originalCurrency} = getTransactionDetails(isEditing && !isEmptyObject(draftTransaction) ? draftTransaction : transaction) ?? {currency: CONST.CURRENCY.USD};
diff --git a/tests/unit/ReportUtilsTest.ts b/tests/unit/ReportUtilsTest.ts
index 18a76121814e..f1300f8b6274 100644
--- a/tests/unit/ReportUtilsTest.ts
+++ b/tests/unit/ReportUtilsTest.ts
@@ -133,7 +133,6 @@ import type {ErrorFields, Errors, OnyxValueWithOfflineFeedback} from '@src/types
 import type {JoinWorkspaceResolution} from '@src/types/onyx/OriginalMessage';
 import type {ACHAccount} from '@src/types/onyx/Policy';
 import type {Participant, Participants} from '@src/types/onyx/Report';
-import type {SearchReport, SearchTransaction} from '@src/types/onyx/SearchResults';
 import {toCollectionDataSet} from '@src/types/utils/CollectionDataSet';
 import {actionR14932 as mockIOUAction} from '../../__mocks__/reportData/actions';
 import {chatReportR14932 as mockedChatReport, iouReportR14932 as mockIOUReport} from '../../__mocks__/reportData/reports';
@@ -1664,8 +1663,8 @@ describe('ReportUtils', () => {
                             currency: 'USD',
                         },
                     };
-                    // eslint-disable-next-line @typescript-eslint/no-deprecated
-                    const transaction: SearchTransaction = {
+
+                    const transaction: Transaction = {
                         transactionID: 'txn1',
                         reportID: '2',
                         amount: 1000,
@@ -1673,8 +1672,7 @@ describe('ReportUtils', () => {
                         merchant: 'Test Merchant',
                         created: testDate,
                         modifiedMerchant: 'Test Merchant',
-                        // eslint-disable-next-line @typescript-eslint/no-deprecated
-                    } as SearchTransaction;
+                    } as Transaction;
 
                     const reportName = getSearchReportName({
                         report: baseExpenseReport,
@@ -8205,6 +8203,20 @@ describe('ReportUtils', () => {
                 expect(shouldEnableNegative(undefined, undefined, CONST.IOU.TYPE.CREATE)).toBe(true);
             });
 
+            it('should return true when report is null and iouType is SUBMIT', () => {
+                expect(shouldEnableNegative(undefined, undefined, CONST.IOU.TYPE.SUBMIT)).toBe(true);
+            });
+
+            it('should return true when report is null, the iouType is SUBMIT, and the receipts do not include a user', () => {
+                const participants = [{accountID: 0, isPolicyExpenseChat: true, isSender: false}];
+                expect(shouldEnableNegative(undefined, undefined, CONST.IOU.TYPE.SUBMIT, participants)).toBe(true);
+            });
+
+            it('should return false when report is null, the iouType is SUBMIT, and the receipts include a user', () => {
+                const participants = [{accountID: 1, isPolicyExpenseChat: false, isSender: false}];
+                expect(shouldEnableNegative(undefined, undefined, CONST.IOU.TYPE.SUBMIT, participants)).toBe(false);
+            });
+
             it('should handle undefined policy type gracefully', () => {
                 const policyWithUndefinedType = {
                     ...createRandomPolicy(4),
@@ -8644,7 +8656,7 @@ describe('ReportUtils', () => {
         const mockReportIDIndex = 1;
         const mockReportID = mockReportIDIndex.toString();
         // eslint-disable-next-line @typescript-eslint/no-deprecated
-        const mockSearchReport: SearchReport = {
+        const mockSearchReport: Report = {
             ...createRandomReport(mockReportIDIndex, undefined),
             reportName: 'Search Report',
             type: CONST.REPORT.TYPE.CHAT,
@@ -8674,7 +8686,7 @@ describe('ReportUtils', () => {
 
         test('returns onyx report when search report is not found but onyx report exists', async () => {
             // eslint-disable-next-line @typescript-eslint/no-deprecated
-            const searchReports: SearchReport[] = [];
+            const searchReports: Report[] = [];
             await Onyx.set(`${ONYXKEYS.COLLECTION.REPORT}${mockReportID}`, mockOnyxReport);
             const result = getReportOrDraftReport(mockReportID, searchReports);
             expect(result).toEqual(mockOnyxReport);
@@ -8682,7 +8694,7 @@ describe('ReportUtils', () => {
 
         test('returns draft report when neither search nor onyx report exists but draft exists', async () => {
             // eslint-disable-next-line @typescript-eslint/no-deprecated
-            const searchReports: SearchReport[] = [];
+            const searchReports: Report[] = [];
             await Onyx.set(`${ONYXKEYS.COLLECTION.REPORT_DRAFT}${mockReportID}`, mockDraftReport);
             const result = getReportOrDraftReport(mockReportID, searchReports);
             expect(result).toEqual(mockDraftReport);
@@ -8690,14 +8702,14 @@ describe('ReportUtils', () => {
 
         test('returns fallback report when no other reports exist', () => {
             // eslint-disable-next-line @typescript-eslint/no-deprecated
-            const searchReports: SearchReport[] = [];
+            const searchReports: Report[] = [];
             const result = getReportOrDraftReport('unknownReportID', searchReports, mockFallbackReport);
             expect(result).toEqual(mockFallbackReport);
         });
 
         test('returns undefined when no reports exist and no fallback provided', () => {
             // eslint-disable-next-line @typescript-eslint/no-deprecated
-            const searchReports: SearchReport[] = [];
+            const searchReports: Report[] = [];
             const result = getReportOrDraftReport(mockReportID, searchReports);
             expect(result).toBeUndefined();
         });
@@ -8729,7 +8741,7 @@ describe('ReportUtils', () => {
 
         test('prioritizes onyx report over draft report when both exist', async () => {
             // eslint-disable-next-line @typescript-eslint/no-deprecated
-            const searchReports: SearchReport[] = [];
+            const searchReports: Report[] = [];
             await Onyx.set(`${ONYXKEYS.COLLECTION.REPORT}${mockReportID}`, mockOnyxReport);
             await Onyx.set(`${ONYXKEYS.COLLECTION.REPORT_DRAFT}${mockReportID}`, mockDraftReport);
             const result = getReportOrDraftReport(mockReportID, searchReports);
@@ -8739,7 +8751,7 @@ describe('ReportUtils', () => {
 
         test('prioritizes draft report over fallback when both exist', async () => {
             // eslint-disable-next-line @typescript-eslint/no-deprecated
-            const searchReports: SearchReport[] = [];
+            const searchReports: Report[] = [];
             await Onyx.set(`${ONYXKEYS.COLLECTION.REPORT_DRAFT}${mockReportID}`, mockDraftReport);
             const result = getReportOrDraftReport(mockReportID, searchReports, mockFallbackReport);
             expect(result).toEqual(mockDraftReport);