What is the Cohen rule?
What is the Cohen rule? Cohan rule is a that has roots in the common law. Under the Cohan rule taxpayers, when unable to produce records of actual expenditures, may rely on reasonable estimates provided there is some factual basis for it. The rule allows taxpayers to claim certain tax deductions on the basis of such estimates.
What is Cohan 39 F 2d 540?
In Cohan v. Commissioner, 39 F. 2d 540, 543–544 (2d Cir. 1930), the Court of Appeals for the Second Circuit held that if the taxpayer has proven deductible expenses but the precise amount remains uncertain, courts can estimate the amount of such expenses.