The Cohan Rule: Estimating The Deductible Expense

Webinar: ID# 1024052
Recorded CD
About This Course:
Typically, when a taxpayer is audited by the IRS, the burden of proof falls on the taxpayer. In order to prove income and expenses, the court has ruled that the taxpayer must keep ‘contemporaneous' records, as per Reg. § 1.6001-1. However, what if the taxpayer has some sort of accident, an act of God, or something else happens where they can't produce contemporaneous records?


Cohan V. Commissioner
  • 1930 Decision Revolves Around an Entertainer
  • Court Fixes Income
  • Cohan States That It Took Something for Him to Make the Income
  • Without Documentation, the IRS Will Allow You to Estimate Some Expenses
  • Done in Representation
  • If Done on a Tax Return Then Form 8275, Disclosure Statement, Needs to Be Filed
The Details
  • Acceptance of the Cohan Rule Approximations Is Always Discretionary With a Court; a Taxpayer Is Not Automatically Entitled to Make an Approximation in a Tax Matter
  • The IRS Must Be Shown, by Oral or Written Statements or Other Supporting Evidence, a Foundation on Which a Reasonable Approximation Can Be Based
About The Presenter

Craig W. Smalley, MST, EA
  • CEO and co-founder of CWSEAPA®, PLLC, and Tax Crisis Center®, LLC; both businesses have locations in Florida, Delaware, and Nevada; has been in practice for almost 23 years
  • Well versed in U.S. Tax Law, and U.S. Tax Court Cases. He specializes in taxation, entity structuring and restructuring, corporations, partnerships and individual taxation, as well as representation before the IRS regarding negotiations, audits and appeals
  • In his many years of practice, he has been exposed to a variety of businesses and has an excellent knowledge of most industries
  • Current Google® Small Business Accounting Advisor for the Google® Small Business Community and is a contributor to AccountingWEB and Accounting Today, and has had twelve books published on various topics in taxation
  • His articles have also been featured in the Chicago Tribune, New York Times, Yahoo Finance, Nasdaq, and several other newspapers, periodicals, and magazines
  • Has been interviewed and been a featured guest on many radio shows and podcasts and is also the co-host of Tax Avoidance is Legal, which is a nationally broadcast weekly internet radio show
  • Has been admitted to practice before the Internal Revenue Service as an Enrolled Agent
  • Master's degree in Taxation, UCLA
The Cohan Rule: Estimating The Deductible Expense
Available on CD format
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