Salopek vs. IRS

TC Memo 1998-385


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 sufficient to estimate the expense.

The Tax Court ruled the IRS’s failure to accept the 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.