cohan rule estimates not permitted cohan rule estimates not permitted

That sometimes leads us to generalize in our educational content. If you keep a business calendar, you may use that information to determine when and where you traveled for a job or business meeting. One of the first cases to allow estimates in federal tax matters wasCohan v. Commr[39 F.2d 540 (2d Cir. endobj [See, e.g., IRC Section 170(f)(8)(A): No deduction shall be allowed under [Code section 170] subsection (a) for any contribution of $250 or more unless the taxpayer substantiates the contribution by a contemporaneous written acknowledgment of the contribution by the donee organization that meets the requirements of subparagraph (B).] The taxpayer must establish a verifiable contribution, as outlined in the regulations [IRC section 170(a) (1)]. The ruling says that the expenses must be reasonable and credible, so you can't go saying that you spent $1,000 on a hammer or $500 on a burrito. strictly comply with the Sec. In Cohan, the taxpayer was an accomplished playwright, director and actor. 1957) (emphasis in original)]. Show full disclaimer, Neither ProQuest nor its licensors make any representations or warranties with respect to the translations. The case was remanded to the BTA to make the estimation, which it apparently did to the parties satisfaction. Find answers to questions about products, access, use, setup, and administration. All rights reserved. For example, this past year a taxpayers travel expense deductions were disallowed because her records did not permit the court to distinguish personal and business expenses (Franklin v. Commr, T.C. Whether it be through your social media accounts or apps like Google, you may be able to track where your phone has been to show where you have traveled on business. If you believe that the findings were not in keeping with the evidence or the U.S. Tax Code, you can file an appeal that will be heard by an IRS appeals agent who will make a determination based on the facts of your case. 1 0 obj 1969);Noz v. Commr, T.C. [13], The Tax Court has applied the Cohan rule to estimate the basis of stock. in deciding whether to use estimates. a4b wfe7:,YA.ug5z39`KB^. Memo. If you can remember the approximate date or name of the other business, you may locate an email copy of the receipt you are looking for or some sort of confirmation email that shows you incurred an expense. [34] 26 C.F.R. 1980) (the court held the patents cost to be $15,000 while the taxpayers testified that they cost $50,000). The taxpayer inCohanwas Broadway legend George M. Cohan, the celebrated composer of the World War I era. The Cohan Rule: Tax Deductions with Incomplete Records The "Cohan rule" is derived from the Second Circuit's 1930 decision, Cohan v. Commissioner, which allowed the taxpayer to approximate travel and entertainment expenses in the absence of records indicating an exact amount. But the BTA, unable to tell exactly how much Cohan had spent (because of the total lack of documentation) concluded that Cohan had failed to satisfy his burden of proof and denied the deductions. [3] Father Duffy Square Monuments George M. Cohan : NYC Parks (nycgovparks.org), NYC Parks, https://www.nycgovparks.org/parks/father-duffy-square/monuments/282. Substantiation standards further derived from the Cohan rule have been held previously to deductions regarding legal fees,[23] interest,[24] stolen property,[25] and home offices. You may have access to it for free by logging in through your library or institution. C.I.R., 35 T.C.M. There is some support in AdButler.ads.push({handler: function(opt){ AdButler.register(165519, 461032, [300,250], 'placement_461032_'+opt.place, opt); }, opt: { place: plc461032++, keywords: abkw, domain: 'servedbyadbutler.com', click:'CLICK_MACRO_PLACEHOLDER' }}); The Cohan rule is based on a Second Circuit decision from 1930 in which George M. Cohan, a great entertainer but a lousy bookkeeper, claimed substantial travel and entertainment expenses but could not provide adequate records (Cohan, 39 F.2d 540 (2d Cir. JFIF ` ` C According to this rule, a taxpayer may approximate travel and entertainment expenses when no records exist, provided the taxpayer has taken all . var plc494109 = window.plc494109 || 0; This leaves preparers uncertain about their authority to use Random selection and computer screening. For instance, 1996-308;Bernardeau v. Commr, T.C. For further guidance, 21 IRC 183(a) provides the general rule that no deduction attributable to an activity engaged in by an individual or an S corporation shall be allowed if such activity is not engaged in for profit. Nevertheless, and fortunately for taxpayers, courts have long recognized the potential injustice of completely disallowing an item (the existence of which they have been convinced) simply because the taxpayer lacks proof of the items exact amount. [32] This is also true for taxpayers alleging records lost through no fault of their own. Cohan's rule states that if you write off a business expense, you must prove the amount was incurred. endobj [14] See Timek v. The Statute of Limitations for Receipts As discussed below, the court in Cohan permitted estimates of deductions even though the taxpayer had no documentation of his claimed expenses. SLc`8|Y:oV=y"ry_v~%?F]|WWYj|buMAwN6Atlp~"buYw^ar]kq*%]\b%J+ZkouP;< Second, the taxpayer must demonstrate the amount of the claimed deduction. 1980). The IRS will calculate the minimum standard amount for the service or item purchased by a taxpayer and will only allow a deduction for that amount. var abkw = window.abkw || ''; But it is not uncommon for busy individuals running a small business to forget to save their receipts, misplace them, or simply lose them. If you are self-employed, you should know that you are more likely to have your individual tax returns audited by the Internal Revenue Service than your friends and family members who earn traditional Form W-2 income as employees. to the credit because he had failed to substantiate his claim. (See below for how IRC section 274 supersedesCohan.) ",#(7),01444'9=82. 1930), held that where the evidence indicated a taxpayer incurred deductible travel or entertainment expenses but the exact amount could not be determined, the court should make a close approximation and not [` var plc289809 = window.plc289809 || 0; Sam Kong Fashions, Inc., T.C. 823, 827-828 (1968),affd per curiam,412 F.2d 201 (2d Cir. On appeal, the Fifth Circuit reversed the district court's decision, noting that the district court should have applied the Cohan rule once it determined that there were some QRAs. The general rule, when dealing with the IRS, is that taxpayers must be able to substantiate all deductions. The Fifth File right from your phone with the IRS & State. One of the first cases to allow estimates in federal tax matters was Cohan v. Comm'r [39 F.2d 540 (2d Cir. Marrying ESG initiatives to business tax planning, Early access to wages may require new employment tax analyses, Determining gross receipts under Sec. to IRS approval. stream })(); var rnd = window.rnd || Math.floor(Math.random()*10e6); Edited by CPAs for CPAs, it aims to provide accounting and other financial professionals with the information and analysis they need to succeed in todays business environment. (CCH) 1232 (T.C. Failure to do so leaves a court with no basis upon which to estimate a reasonable allowance, resulting in complete loss of the desired tax benefit: When a petitioner proves that some part of an expenditure was made for deductible purposes and when the record contains sufficient evidence for us to make a reasonable allocation, we will do so [Epp v. Commr, 78 TC 801, 807 (1982)]. The rule allows taxpayers to claim certain tax deductions on the basis of such estimates. <> For example, the court refused expense deductions for claimed business travel when the taxpayer could not document every element of his trips, including the number of trips, when they were taken, and their business purpose. Memo. On appeal, the Second Circuit reversed the disallowance [Cohan, 39 F.2d 540 (1930)]. AdButler.ads.push({handler: function(opt){ AdButler.register(165519, 459481, [300,250], 'placement_459481_'+opt.place, opt); }, opt: { place: plc459481++, keywords: abkw, domain: 'servedbyadbutler.com', click:'CLICK_MACRO_PLACEHOLDER' }}); if (!window.AdButler){(function(){var s = document.createElement("script"); s.async = true; s.type = "text/javascript";s.src = 'https://servedbyadbutler.com/app.js';var n = document.getElementsByTagName("script")[0]; n.parentNode.insertBefore(s, n);}());}. It can also be used to determine when you may have had an appointment with a service provider or meeting with a vendor. Cir. [Taxpayers have a general burden of proof to sustain their claimed deduction, but some provisions (e.g., IRC section 274 dealing with a variety of expenses such as travel, meals, and gifts) impose specific documentation requirements.] This article discusses the history of the deduction of business meal expenses and the new rules under the TCJA and the regulations and provides a framework for documenting and substantiating the deduction. 2018). <> 3 0 obj Although the rule remains useful for tax preparers, it is limited, and its application varies by the taxpayer's circumstances. Searching old emails. 1930) where the court held that the tax court may make a reasonable estimate of the allowable deduction, "bearing heavily if it chooses . You are not a professional record-keeper. var plc456219 = window.plc456219 || 0; For cash donations (including gifts by check or other monetary gifts), the taxpayer must retain either a cancelled check, receipt, or other reliable evidence [Treasury Regulations section 1.170A-13(a)(1)]. 1930). This is usually the result of the taxpayer omitting income from his or her return or making a serious error. Tax preparers face sanctions for But this obligation is more often honored in the breach. All rights reserved. Seems a bit onerous and even contradictory, but it is true. It is often a lifesaver for business owners who cannot locate their receipts, but several recent rulings by the United States Tax Court have enforced limits on the use of the Cohan rule. Read ourprivacy policyto learn more. Examples: State University, [emailprotected]. When he included lots of expenses in his tax return, it was rejected. However, relying on the Cohan rule is anything but certain. var divs = document.querySelectorAll(".plc461032:not([id])"); (But to allow nothing at all appears to us inconsistentThe amount may be trivial and unsatisfactory, but there was a basis for some allowance, and it was wrong to refuse any). Indeed, it might be a rare taxpayer who, like the taxpayer in Cohan, is wholly unable to document the existence and the amount of a disputed item. ICYMI | A Practical Roadmap for Introducing Agility to Certified Public Accounting, ICYMI | Practice Management and Tax Practice in the Current Environment, ICYMI | Seven Ways to Decrease Stress at Work, Tax Changes in the Inflation Reduction Act of 2022, Why CPAs Misfire in Personal Financial Planning, Tax Software in the Ongoing Pandemic Environment, Technostress and the Accounting Profession, Cybersecurity Resources for Accounting Practices, ICYMI | A Practical Roadmap for Introducing Agility to Certified Public Accounting Firms. var plc461032 = window.plc461032 || 0; (CCH) 1177 (T.C. Because taxpayers relying upon the Cohan rule For further information Deductions that seem suspiciously high, like claiming all of the costs related to your home are deductible, a deduction for the entire cost of your personal vehicle, or deductions for overly generous charitable contributions. return preparers are frequently forced to use estimates Please log in through your library or institution to check if you have access. The Cohan rule gives taxpayers a number of options beyond providing receipts for demonstrating that money was spent on business operations, but it will require a bit of effort on your part. 1930). var absrc = 'https://servedbyadbutler.com/adserve/;ID=165519;size=300x250;setID=282686;type=js;sw='+screen.width+';sh='+screen.height+';spr='+window.devicePixelRatio+';kw='+abkw+';pid='+pid282686+';place='+(plc282686++)+';rnd='+rnd+';click=CLICK_MACRO_PLACEHOLDER'; Please email [email protected] if you have questions. In this circumstance, courts relying onCohanhave generally allowed the taxpayer a deduction in an amount the court deems reasonable based on the taxpayers limited documentation or their unsubstantiated testimony, albeit often less than the taxpayer originally claimed. endstream endobj startxref var abkw = window.abkw || ''; Related examination. endobj div.id = "placement_461033_"+plc461033; upon in an original return for reporting purposes and what, if The court was not persuaded to use the travel records the taxpayer created only after IRS notification of examination, holding while a contemporaneous log is not required to substantiate the deduction, a taxpayers subsequent reconstruction of his or her expenses does require corroborative evidence with a high degree of probative value to support such a reconstruction, in order to elevate that reconstruction to the same level of credibility as a contemporaneous record (Franklin, at 13-14). Sec. [10] See Reese v. [28] In general, Section 274 limits or disallows deductions for certain meal and entertainment expenditures that otherwise would be allowable, primarily under Section 162(a) which allows a deduction for ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business. 1.41-2? }=t>5o7$K{8_9 $K*Y]=#utg,oP;- 4OI+"l!\L&5?'GClQ[VIuR7!5-[H5-33;2r 3OVeidg[}T7u]-cXAU:_(MTr&M,-{}&*6&wlU~mzVj PROQUEST AND ITS LICENSORS SPECIFICALLY DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES FOR AVAILABILITY, ACCURACY, TIMELINESS, COMPLETENESS, NON-INFRINGMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. [3] Approximations are not allowed for such expenses. research credits if the taxpayer can prove that it incurred rule is based on a Second Circuit decision from 1930 in 1996). develop its own estimate. var absrc = 'https://servedbyadbutler.com/adserve/;ID=165519;size=300x600;setID=289809;type=js;sw='+screen.width+';sh='+screen.height+';spr='+window.devicePixelRatio+';kw='+abkw+';pid='+pid289809+';place='+(plc289809++)+';rnd='+rnd+';click=CLICK_MACRO_PLACEHOLDER'; 1991), stating Cohanwould allow the tax court to estimate the losses;Portillo v. Commr, 932 F.2d 1128, 1134 (5th Cir. The Tax Court has applied the highest possible basis when a loss deduction was involved, [14] and the lowest possible basis when the amount of a gain was in dispute [15] when the basis of stock is estimated on the strength of submitted evidence. The Cohan Rule is a discretionary standard and can be used to support a reasonable estimate of compliance requirements." This worked well for the taxpayers in Armando Sandoval Lua v. Commissioner TC Memo 2011-19 in that the taxpayers provided sufficient evidence demonstrating additional compensation expense was incurred for additional . During a correspondence audit, the IRS will send a letter to the taxpayer seeking additional information. For instance, is The classicCohansituation is the taxpayer who says, I know I spent some money. endstream endobj 496 0 obj <>stream The issue of missing or lost receipts is so common that in 1930 the United States Court of Appeals For the Second Circuit outlined a rule on how the IRS should proceed in those situations. estimates when the clients records do not strictly adhere to 1930)]. The IRS can, and often does, disallow deductions based on the taxpayer's failure to properly document or substantiate the deduction in non-IRC section 274 circumstances. mercy of the Service, but a reasonable interpretation of the endobj $.' In the business deduction context, the taxpayers threshold burden is evidentiary. He has been previously recognized as the Young CPA of the Year in the State of Texas (an award given to only one CPA in the state of Texas under 40). A corollary is that the IRS is under no obligation to estimateor accept a taxpayers estimateunderCohan. stream In doing so, the Tax Court has said that the taxpayer needs to supply information to substantiate their claimed expenses. Styles include MLA, APA, Chicago and many more. Sec. The IRS will notify you of your audit by mailing you an audit letter by certified mail. Memo. (CCH) 1392 (T.C. Careful in your research -Cohan was previously allowed for charitable contributions. CPAs should refer to AICPA Statement on Standards for Tax [17] In William, the stock was valued, at the time of confiscation, at $1.5 million. The rule was outlined in the courts decision in Cohan v. Commissioner, which involved undocumented business deductions claimed by the famous Broadway showman George M. Cohan. [email protected]. This the court will not do.); Dowell v. United States[752 USTC 9819], 522 F.2d at 714; Williams v. United States, 245 F.2d 559 (5th Cir. Cohan rule as guidancewhen taxpayer records do not While this documentation will show that the expense was legitimate, it rarely shows why the payment was made. 08-20377 (5th Cir. The use of close approximations or estimates to substantiate certain business expenses was approved in Cohan v. Comm'r, 39 F.2d 540 (2d Cir. deduction give rise to the need to attach a Form 8275 A recent Fifth Circuit decision AdButler.ads.push({handler: function(opt){ AdButler.register(165519, 459496, [300,600], 'placement_459496_'+opt.place, opt); }, opt: { place: plc459496++, keywords: abkw, domain: 'servedbyadbutler.com', click:'CLICK_MACRO_PLACEHOLDER' }}); Mr. Freeman is the founding member of Freeman Law, PLLC. The cases cited above conclusively demonstrate that taxpayers must establish some reasonable grounds for estimation or allocation if they are to prevail. 1976), affd, 615 F.2d 226 (5th Cir. Knowledge is power. Id. The IRS issued a refund but later document.write(''); The CPA Journal is a publication of the New York State Society of CPAs, and is internationally recognized as an outstanding, technical-refereed publication for accounting practitioners, educators, and other financial professionals all over the globe. Rather than keep you waiting, we have only translated the first few paragraphs. 2019), affd, 820 Fed. Preparers are often-perhaps vaguely-familiar with the "Cohan rule," and often rely on this rule to justify estimation. In many cases the courts have refused to apply the rule. with the record-keeping requirements under Regs. You may have access to different export options including Google Drive and Microsoft OneDrive and citation management tools like RefWorks and EasyBib. 1 0 obj C.I.R., 44 T.C.M. by the regulations? income estimates when it had failed to keep adequate records qualified expense occurred, . He has previously been recognized by Super Lawyers as a Top 100 Up-And-Coming Attorney in Texas. Circuit held that under the Cohan rule, if a The rule Facing an IRS tax audit with missing receipts? )hdZcWR46Xn f+(PBc1hNAP gAtPa|S0 eQHfm,1YU0jO fpqM%J?u+[(W/_$HL He has been credited with writing and publishing over 300 songs (including Youre a Grand Old Flag), over a dozen musicals, being a fabulous entertainer, networker, and generally credited with making Broadway into the global landmark it is today (see his statute and plaque in Manhattans famous Duffy Square). when records are missing or incomplete, Temp. Most tax professionals stress that the best defense against the IRS in an audit is clear and accurate business record keeping, including retaining all necessary receipts. that included the credit. He is a former chairman of the Dallas Society of CPAs (TXCPA-Dallas). [30] The core portion of the Cohan holding, however, remains, the possibility of substituting the Tax Courts estimation in place of a total disallowance for expenses not covered by Section 247(d). g1>co!i"L 1J:kan*}>r8"GC6&-Cl@v[i"jr!F r`XCs9YvP?Zs"h* g@L!0%0(I.RA ED)8Ocm8*ULxT4(9i;GN[1QL The parties agreed that McFerrin had not strictly complied [3] His most memorable accomplishment, however, may be his memorialization in the tax code. [4] The court then recognized that strict proof of otherwise deductible business expenses is not always available. (function(){ [33] Generally, substantiation is met by elements such as: amount, date place, business purpose and reasonably direct business relationship. This article provides an overview of approximation in tax matters and notes where it has been limited by statute, regulations, and court decisions. ",#(7),01444'9=82. <> The Cohan Rule serves as an exception to stringent IRS recordkeeping requirements, allowing taxpayers everywhere to prove by "other credible evidence" that they actually incurred the expenses. However, if you have no receipts, the IRS will not allow you to deduct the full amount of your expenses. respect to listed property. [29] These strict rules generally require that a taxpayer substantiate with adequate records or by sufficient evidence corroborating the taxpayers own statement: (1) the amount of the expense; (2) the time and place the expense was incurred; (3) the business purpose of the expense; and (4) in the case of an entertainment expense, the business relationship between the person entertained and the taxpayer. to document its expenses. Try and log in through your institution to see if they have access to the full text. [2], This holding can be attributed to the one and only, George M. Cohan. preparing many tax filings. If you are heading into an audit and know that you have not reported significant business income to the IRS, it is generally a good idea to hire a tax pro to represent you during the audit. Moreover, there are still numerous cash transactions in the U.S. economy; in these circumstances, theCohanrule continues to be important. 1930)). 2020-119, at *58. endobj 1930)). Courts will not guess, nor will they approve or sanction the taxpayers guess. First, the taxpayer must prove the existence of the expense by credible evidence; failure to do so naturally precludes any estimate of its amount. Cohan rule is a that has roots in the common law. In McFerrin, No. [5] In the words of the Cohan court, absolute certainty in such matters is usually impossible and it is not fatal that such results will inevitably be speculative; many important decisions must be such. [6], The Cohan Rule, however, is not a free pass. 1930) Contacting suppliers and service providers for invoices and receipts. During filing season, tax preparers will inevitably confront the question of how to report items for which a taxpayer lacks sufficient (or even any) documentation. 1976). Mr. Freeman has been recognized multiple times by D Magazine , a D Magazine Partner service, as one of the Best Lawyers in Dallas, and as a Super Lawyer by Super Lawyers, a Thomson Reuters service. serves as a reminder that practitioners also have a Memo 2019-90]. var rnd = window.rnd || Math.floor(Math.random()*10e6); a Form 8275, Disclosure Statement, required if a preparer uses Perhaps the most common example of documentation requirements specifically established by statute is IRC section 274, which disallows or limits certain travel, meals, and entertainment expenses incurred in a taxpayers business. 6694 (understatement of taxpayers liability by tax return (Cohan Rule could not be applied to utility expenses because the taxpayer did not substantiate them and did not offer any evidence that the expenses could be reasonably apportioned). After failing to keep atop his substantial Broadway expenditures, Mr. Cohan offered for the courts approval his tax code debut. In his court case, Cohan claimed he was too busy to keep organized records to document the business travel and entertainment expenses he claimed on his federal tax return. Misclassifying employees or failing to issue information returns like Forms W-2 and 1099. 3 0 obj Gifts over $500,000 require an appraisal, a contemporaneous written acknowledgement and Form 8283 [IRC Section 170(f)(11)]. For example, the Cohan rule does not apply to items that are listed in Section 274(d) of the Internal Revenue Code. var pid228993 = window.pid228993 || rnd; var AdButler = AdButler || {}; AdButler.ads = AdButler.ads || []; In order to get full access, you need to be on campus or log in through your institution (. New York, NY 10005 [1] The rule has since stood for the proposition that, with some exceptions, taxpayers who are unable to produce complete records may nonetheless be allowed to estimate certain tax deductions. The rule allowing deduction of expenses is based on the principle that if the IRS asserts a deficiency but other evidence clearly indicates that some deduction should be allowed, the court can develop its own estimate. However, relying on the Cohan Appx. Memo. Don't be too worried about jail time for the audit but you will need the assistance of a professional with a good understanding of tax law to guide you. C.I.R., (1951) 17 TC 171, acq, affd (1953, CA2) 43 AFTR 178, 201 F2d 499, 53-1 USTC 66047. If the IRS chooses to allow some of the taxpayers claimed deduction in the face of incomplete or unconvincing evidence thereof, a court is unlikely to allow the taxpayer more than the IRS. Finally, the taxpayer must provide some basis upon which the IRS or a court can estimate the amount of the item. AdButler.ads.push({handler: function(opt){ AdButler.register(165519, 456219, [300,600], 'placement_456219_'+opt.place, opt); }, opt: { place: plc456219++, keywords: abkw, domain: 'servedbyadbutler.com', click:'CLICK_MACRO_PLACEHOLDER' }}); var AdButler = AdButler || {}; AdButler.ads = AdButler.ads || []; However, on appeal, Judge Learned Hand reversed the IRS. var abkw = window.abkw || ''; The receiving organization must supply a receipt or written communication from the donee organization showing its name, plus the date and amount of the contribution [IRC section 170(f)(17)]. What benefit does the Cohan rule provide for taxpayers with incomplete business records the business or taxpayer will be allowed to estimate and deduct certain types of business expenses only if? The Cohan rule, as it is known, is almost 70 years old, but it has withstood the test of time. While not impossible A corollary is that the IRS is under no obligation to estimateor accept a taxpayer's estimateunder Cohan. at n12 (Indeed, if a claim had not been filed with the Commission, it is likely that we would find petitioners claim here far less believable.), [22] See Human Engg Inst. Mr. 2005-157 and Stewart, T.C. 7407 (action to enjoin tax return preparers), and other But this obligation is more often honored in the breach. %%EOF When dealing with clients who have incomplete records, The court has traditionally applied the annual royalties or evidence of R&D costs as a factor in the estimate. Without some documentation, the Cohan rule doesn't help you. Your use of the translations is subject to all use restrictions contained in your Electronic Products License Agreement and by using the translation functionality you agree to forgo any and all claims against ProQuest or its licensors for your use of the translation functionality and any output derived there from. Second, it is not a license for taxpayers to simply guess or make up expenses (and therefore deductions), nor does it excuse sloppy recordkeeping. 32, 41 (1993)]. The rule allows taxpayers to claim certain tax deductions on the basis of such estimates. Today, Cohan It allows taxpayers to deduct expenses for business even if they do not have the receipts to document them. C.I.R., 27 T.C.M. G@M" ,P!S"Zi|& (u=1k\LJ}j _] When common sense hYms6/g:KZ4r?,L*IvD9,}vqfcLur,WKf#bB*Ia-,LFB38B ,&%pfp.agIiH.0>_8_\AhWpXL4L\]>i.gI8%qcF:?_ysBQz(^qpe1U,f{vd8-i^m9;?a{.NEs4+} 0LBb{O*644t|/M7U;j+>Y4$>OjfIR|]f$AyoRI0,&I2-FPeI5? [30] See Balyan v. Commr, T.C. 55 The Cohan rule allows courts to make estimates where there is some indication that the taxpayer is entitled to the tax deduction or credit.

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