Main Issue:
- Substantiation / Applying Cohan doctrine
Facts:
- Taxpayer used estimates in place of actual amounts citing Cohan rule
Conclusion:
- Court allowed all but daughter’s QREs confirming that the taxpayer was performing qualified research activities and there was a basis on which to estimate the QREs relying on testimony, technical backgrounds and experience
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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