Cohan Rule

• A Supreme Court ruling for 1930 provides the basis for the ability to reconstruct your tax documents when they are not available. The Cohan Rule states that taxpayers do not have to prove their expenses with absolute certainty, but can instead make a close approximation estimate for the claimed expenses. While the Cohan Rule is not law, it does provide a standard that taxpayers and the IRS can use when reconstructing receipts.
  
  

Travel Expenses

• Your appointment book or calendar can provide information about what business trips you took in the audit year. Use online maps to reconstruct your mileage. If you have a global positioning system device, you may be able to reconstruct your trips based on information contained in its data. You also can use information from a smartphone application that tracked your movements. Canceled checks and credit card statements can show gas or other purchases to verify automobile trips and airline ticket purchases.
  
  

Equipment and Office Supplies

• Credit card statements and canceled checks can verify the purchase of office equipment and supplies, but if you paid cash, you can still verify the expense. Call the store where you made the purchase. If you opted for insurance on the equipment or the store performed the installation, it will have records of when you purchased items. Supplies are more difficult to verify unless you make regular purchases. If you purchase supplies from a vendor with a purchase order number, request a printout from the company of your purchases. You may not be able to claim supply purchases if you do not have a way of making a reasonable estimation of cost.
  
  

Meal Receipts

• If you have business meetings at restaurants, you can use your appointment book or a calendar that lists your appointments to verify any claimed meal expenses. If you have credit card statements or canceled checks for any meals, you can use them to estimate the cost of meals where you do not have receipts. For example, if you have verification for 27 meals but know that you had 38 business lunches, add all of your receipts and divide by 27. Multiply the average by 11 to estimate the cost of the meals without receipts.