Substantiation and Disclosure

Free CPA REG (Taxation & Regulation) lesson in Ethics, Professional Responsibilities and Federal Tax Procedures. 14 min read, ~2,096 words.

Cohan rule lets courts estimate ordinary deductions when records are weak, but §274 strictly excludes meals, travel, automobiles, gifts, entertainment. §274(d) requires contemporaneous records of amount, time, place, business purpose, and business relationship. Three confidence levels: reasonable basis (~20%), substantial authority (~40%), more likely than not ( 50%). Form 8275...

What this lesson covers

• Content
• Example 1
• Example 2
• Common Mistakes
• Check Your Understanding
• Exam Shortcuts

Learning objectives

• I.C2

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