- 3 -
A taxpayer generally must keep records sufficient to
establish the amounts of the items reported on his Federal income
tax return. Sec. 6001; sec. 1.6001-1(a), (e), Income Tax Regs.
However, in the event that a taxpayer establishes that a
deductible expense has been paid but that he is unable to
substantiate the precise amount, we generally may estimate the
amount of the deductible expense, bearing heavily against the
taxpayer whose inexactitude in substantiating the amount of the
expense is of his own making. Cohan v. Commissioner, 39 F.2d
540, 543-544 (2d Cir. 1930). We cannot estimate a deductible
expense, however, unless the taxpayer presents evidence
sufficient to provide some basis upon which an estimate may be
made. Vanicek v. Commissioner, 85 T.C. 731, 743 (1985).
Special substantiation rules exist for charitable
contributions: A deduction for charitable contributions
generally is not allowed in the absence of written records. Sec.
1.170A-13, Income Tax Regs; see also sec. 6001; sec. 1.6001-1(a),
(e), Income Tax Regs. Specific requirements, which vary
according to the type and amount of the contributions, do not
need to be set out in detail here.
Petitioners admit that they have no substantiating documents
for the various disallowed expense deductions. Petitioners also
were unable to provide at trial any reliable details concerning
the payment of the expenses, other than with respect to the
Page: Previous 1 2 3 4 5 6 Next
Last modified: May 25, 2011