Steve Stockman of Texas introduced a bill he called the “The Dog Ate My Tax Receipts Act,” to allow us all to try out some excuses. In the aftermath of the IRS mess over the Lois Lerner emails, Rep. The fact that some taxpayers may have trouble maintaining good records to show the IRS may actually have been helped by the IRS's own problems maintaining evidence. Even charitable contributions have been allowed under the Cohan Rule, although not in cases subject to special strict substantiation requirements. It isn't just business expenses that can be substantiated in this way. If you get over that hurdle and can make a reasonable approximation of the expenses, your tax position may be sustained despite your lack of documentation. Still, the IRS or a court may be convinced by oral or written statements or other supporting evidence. Not surprisingly, the Cohan Rule often doesn’t impress the IRS. You may have to go to court, and the argument doesn’t always work even there.
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