{"id":4961,"date":"2017-06-26T05:00:34","date_gmt":"2017-06-26T12:00:34","guid":{"rendered":"http:\/\/evergreensmallbusiness.com\/?p=4961"},"modified":"2019-05-21T11:59:08","modified_gmt":"2019-05-21T18:59:08","slug":"tax-deduction-receipts","status":"publish","type":"post","link":"https:\/\/evergreensmallbusiness.com\/tax-deduction-receipts\/","title":{"rendered":"Tax Deduction Receipts"},"content":{"rendered":"

\"Picture<\/a>Taxpayers always wonder about whether or not they can deduct expenses when they don’t have a receipt. Generally, yes, you can… but you want to proceed with caution if you’re going to try this. The IRS and the courts have some tax deduction receipts rules you want to follow.<\/p>\n

The other thing you want to understand, however, is where and how the IRS will look at your tax deduction receipts if push comes to shove. So let’s talk about all this stuff in terms of the typical small business owner.<\/p>\n

Tax Deduction Receipts and the Cohan Rule<\/h2>\n

Here’s maybe the first thing you want to know. There was a tax court case Cohan v. Commissioner<\/em>, 39 F. 2d 540 (2d Cir. 1930)<\/a>. It set a precedent, now commonly referred to as the “Cohan rule,” that says you can deduct expenses even without a tax deduction receipt if you can provide a reasonable estimate of what these expenses were.<\/p>\n

That’s the good news. And you want to know this tax deduction receipts rule. In an audit you may want to pull this rabbit of your hat.<\/p>\n

Exceptions to the Cohan Rule<\/h2>\n

However, Congress has passed some exceptions to the Cohan rule [IRC \u00a7 274(d)<\/a>] related to the following items:<\/p>\n