Tax Court Revisits 'Cohan Rule' for Estimating Business Expense Deductions in New Case

The article discusses the Tax Court's review of the "Cohan rule" in a new business expense case (Branch, TC Memo 2026-51). The Cohan rule, originating from a case involving vaudeville performer George M. Cohan, allows business owners to reasonably estimate deductible expenses when it's clear expenses were incurred but records are lacking. The article notes that this principle often leads to mixed outcomes in court, and emphasizes that keeping accurate records remains the best practice for substantiating deductions.