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Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

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Wednesday, June 25, 2014

New Bill Could Lend Excuses To Taxpayers For Lost Receipts

Dog ate homework

Texas Representative Steve Stockman has introduced a new bill titled, “The Dog Ate My Tax Receipts Act.”  A clever pun on the IRS’s inability to produce emails, this bill seeks to allow taxpayers to “offer the same flimsy, obviously made-up excuses the Obama administration uses.”  For taxpayers who fail to provide documents requested by the IRS, the bill would allow them to claim reasons such as: the dog ate my tax receipts; received water damage in the trunk of Ted Kennedy’s car; was short on toilet paper while camping; among others. 

While this is most likely not serious, keeping receipts is critical. If you cannot find one, remember the Cohan Rule, from Cohan v. Commissioner.  Here, the Second Circuit ruled that taxpayers could prove “by other credible evidence” they actually incurred deductible expenses.  While the Cohan Rule may not always be applicable, oral or written statements coupled with a reasonable approximation could make up for lack of documentation. 

See Robert Wood, Lois Lerner’s Law Makes ‘I Lost My Receipts’ Legal With IRS!, Forbes, June 24, 2014. 

http://lawprofessors.typepad.com/trusts_estates_prof/2014/06/new-bill-could-lend-excuses-to-taxpayers-for-lost-receipts.html

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