Doug,a self-employed consultant,has been a firm believer in maintaining a paperless office.Unfortunately,he recently lost all of his business records in a ransomware attack,and his backup system was also compromised.Which of the following cases should Doug investigate to better understand substantiation requirements for business expenses?

Question

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C)Under the Cohan rule,the courts will allow a deduction that is not properly substantiated by the taxpayer if an expenditure clearly has been made.The Cohan rule will not apply to all categories of expenses such as travel and entertainment.

Doug,a Self-Employed Consultant,has Been a Firm Believer in Maintaining a Paperless