1. The Cohan Case
You might want to look up the Cohan vs. Commissioner case. Its citation is 2 USTC Par. 489, or alternatively 39 F.2d 540. First of all, one or two of you might see if you can find it. If you can, take a look at the case. This is a VERY important case for tax practitioners, as it explains that in many cases you can still get deductions even if you don’t have the receipts to prove it. The Cohan case is very useful and I have used it several times in my tax practice with very good results, to still get my client deductions allowed, even when the client did not have the receipts.
Who was George M. Cohan? You can look him up on the internet. 100 years ago, he was one of the most famous men in America. And what was the case about? What was the issue and how was it resolved?
2. Thinking as a Tax Planner
Your client is offered a job which will last one year (ASSUME HE IS A PROFESSIONAL FOOTBALL PLAYER, AND VERY HIGHLY PAID), and is given two options for getting paid. They can choose to get monthly checks for $325,000 each, or $250,000 per month with the extra $900,000 placed in escrow and paid to the employee, with interest, upon retirement at some future date (more than one year). What are the tax implications of the alternatives? What is your recommendation?