Robert A. White - Page 6

                                        - 5 -                                         
          deduction claimed.  INDOPCO, Inc. v. Commissioner, 503 U.S. 79,             
          84 (1992); New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440             
          (1934).  Taxpayers are required to maintain records sufficient to           
          enable the Commissioner to determine their correct tax liability.           
          Such records must substantiate both the amount and purpose of the           
          claimed deductions.  Sec. 6001; Higbee v. Commissioner, 116 T.C.            
          438 (2001); sec. 1.6001-1(a), Income Tax Regs.                              
               When a taxpayer establishes that he has incurred a                     
          deductible expense but is unable to substantiate the exact                  
          amount, we are generally permitted to estimate the deductible               
          amount.  Cohan v. Commissioner, 39 F.2d 540, 543-544 (2d Cir.               
          1930).  To apply the Cohan rule, however, the Court must have a             
          reasonable basis upon which to make an estimate.  Vanicek v.                
          Commissioner, 85 T.C. 731, 742-743 (1985).                                  
          I.   Charitable Contributions                                               
               Section 170(a) allows as a deduction any charitable                    
          contribution made within the taxable year.  Deductions for                  
          charitable contributions are allowable only if verified under the           
          regulations prescribed by the Secretary.  Sec. 170(a)(1).                   
               Petitioner claimed a deduction for $755 of cash                        
          contributions during 2003.  He did not provide any canceled                 
          checks, receipts, or other reliable written records to verify the           
          claimed contributions.  He did not provide any contemporaneous,             
          written acknowledgments.                                                    

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next 

Last modified: March 27, 2008