Main Issue:
Substantiation / Applying Cohan doctrine
Facts:
Taxpayers used estimates in place of actual amounts citing the Cohan rule
Conclusion:
The court denied the application of the Cohan doctrine citing the reconstruction of the QREs as unreliable and inaccurate and further noting that the presence of QRAs was also not established
Take-Away Point:
Companies are more likely to get court support in their estimates if it has proven that R&D activities are in existence and it is only the estimation of the amount of R&D at issue and the estimation method is credible
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