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deduction, we may estimate the amount allowable in some
circumstances. See Cohan v. Commissioner, 39 F.2d 540, 543-544
(2d Cir. 1930). There must be sufficient evidence in the record,
however, to permit us to conclude that a deductible expense was
paid or incurred in at least the amount allowed. See Williams v.
United States, 245 F.2d 559, 560 (5th Cir. 1957). In estimating
the amount allowable, we bear heavily upon the taxpayer whose
inexactitude is of his or her own making. See Cohan v.
Commissioner, supra at 544.
For certain kinds of business expenses, such as travel,
meal, and entertainment expenses, and those expenses attributable
to “listed property”, section 274(d) overrides the rule of Cohan
v. Commissioner. See Sanford v. Commissioner, 50 T.C. 823, 827
(1968), affd. per curiam 412 F.2d 201 (2d Cir. 1969); sec. 1.274-
5T(a), Temporary Income Tax Regs., 50 Fed. Reg. 46014 (Nov. 6,
1985). Listed property includes any passenger automobile and any
other property used as a means of transportation, under section
280F(d)(4)(A)(i) and (ii), unless excepted by section
280F(d)(4)(C) or (d)(5)(B).
Under section 274(d), a taxpayer must satisfy strict
substantiation requirements before a deduction is allowable. See
sec. 274(d); sec. 6001; sec. 1.6001-1(a), (e), Income Tax Regs.
If section 274(d) applies, we may not use the Cohan doctrine to
estimate those expenses covered by that section.
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Last modified: May 25, 2011