Salopek v. IRS
TC Memo 1998-385
Summary of the Case
Taxpayers can deduct expenses by estimating them – even if they have few, if any, records.
In general, a taxpayer has the duty to keep good records substantiating the deductions claimed on a tax return. Partial records are acceptable, if they are sufficient to estimate the expense.
The Tax Court ruled that the IRS’s failure to accept a taxpayer’s records to estimate the claimed deductions was unreasonable. It allowed the deductions, and then awarded the taxpayer $12,565 in attorney’s fees and costs.