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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,
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Last modified: March 27, 2008