- 7 - Taxpayers may meet their burden even without proof of precise numbers. If a taxpayer claims a business expense, but cannot fully substantiate it, we may approximate the allowable amount. Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir. 1930). For this rule to apply, the taxpayer must provide at least some reasonable evidence from which to estimate a deductible amount. Vanicek v. Commissioner, 85 T.C. 731, 742-743 (1985). We need not apply the Cohan rule at all if the evidence is insufficient to identify the nature or estimate the extent of the expenses. See Williams v. United States, 245 F.2d 559, 560 (5th Cir. 1957). Because the evidence Mr. Obot provided lacks credibility, we will not use the Cohan rule in recalculating his deductions. See Lerch v. Commissioner, 877 F.2d 624, 628-629 (7th Cir. 1989) (no obligation to apply Cohan rule where taxpayer fails to cooperate with Commissioner and Tax Court), affg. T.C. Memo 1987-295. With these general thoughts in mind, we now look to each of the disputed deductions. Schedule A The disputed Schedule A deductions are taxes that Mr. Obot paid. The first group are excise taxes of $1,021 charged on his personal utility, telephone, gasoline, and sewer bills. Excise taxes on personal bills are not deductible, Fife v. Commissioner, 73 T.C. 621, 623-624 (1980), and we disallow them.Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011