I’m going to say the same thing I keep saying when these polls keep coming up. Ignore the republican sample, it’s a complete waste of time. The republican party is so blatantly partisan and ignorant at is point that I’d be shocked if more than a few percent of them didn’t disapprove of the handling of Benghazi (or Obamacare, or the IRS, or insert whatever the fake scandal of the day is).
Of course, if you look at the facts, it’s a gigantic steaming load. There is no indication that the IRS acted out of line - its auditing of political groups was bipartisan and entirely legitimate. The only reason anyone thinks there’s anything to this is “where there’s smoke there’s fire”, and the republicans have been holding a crazy, taxpayer-funded witch hunt - largely to distract from the complete and utter failure of the party to do anything remotely productive over the last 8 years. There is simply nothing there.
On the one hand, the whole hard drive debacle looks pretty bad to this non-tecchie (reading tecchies is no help–I’m finding persuasive-looking gobbledygook on both sides of the question).
On the other hand, six years of Republican outrage over nothing makes me highly skeptical of manufactured scandal #317 or whatever. Just playing the odds, this is another fake scandal, and I’m just too ignorant to understand why.
On the first hand, I don’t think odds work that way.
LOL! Obama was re-elected and he doesn’t look like he’s going to resign anytime soon. We all saw how Romney tried to use Benghazi during that debate. It was as much of a foot in mouth moment as the whole 47% thing. You guys are simply circle-jerking in your little right-wing bubbles. Nobody outside of that echo chamber cares, and nobody pays attention to Issa’s witch hunts
What the IRS will require under examination is documentation to support the deductions claimed on your tax return. No documentation, no deductions. It’s not really going to come down to a statement of “We don’t believe you” but it might feel that way to the taxpayer. Taxpayers have a tendency to take everything personally under audit, and the difference between “we don’t believe you” and “you provided insufficient documentation” is a fine line.
(And I have not been audited, but I’m a CPA who has represented many clients under audit.)
Cohan v. Commissioner, decided by the 2nd Circuit in 1930 (full text of opinion), is still (mostly) good law: it held that reasonable and credible estimates can stand in for detailed documentation. You can’t just say “oops, I got nothing” and hope the IRS believes you (because they won’t); you can, however, say that “My records were lost due to X disaster; here’s the evidence for that. Lacking precise documentation, I have tried to reconstruct them by doing x, y, and z; here’s how I computed my estimates and what I based them on and all the steps I went through.” If your methodology is reasonable, you have a reasonable chance of getting the IRS to accept your reconstructions, based on the Cohan rule.
I’m not seeing that rule anywhere in the case you cited. It says that the Board of Tax Appeals had to allow him some sort of deduction because it had made a factual finding that Cohan had actually spent some money on trips, but it doesn’t say he was entitled to estimate the trip costs himself.
"Absolute certainty in such matters is usually impossible and is not necessary; the Board should make as close an approximation as it can, bearing heavily if it chooses upon the taxpayer whose inexactitude is of his own making. But to allow nothing at all appears to us inconsistent with saying that something was spent. True, we do not know how many trips Cohan made, nor how large his entertainments were; yet there was obviously some basis for computation, if necessary by drawing upon the Board’s personal estimates of the minimum of such expenses. The amount may be trivial and unsatisfactory, but there was basis for some allowance, and it was wrong to refuse any, even though it were the travelling expenses of a single trip. It is not fatal that the result will inevitably be speculative; many important decisions must be such. "
As the rule has been applied in subsequent cases, a taxpayer’s own estimates have been accepted when there is some basis for computation. For example, in Bauer v. Commissioner (2012), Mr. Bauer ran a moving company and hired day laborers to pack and move household goods. He didn’t even bother to write down their names, much less keep good records; at trial, the tax court allowed him to use figures from a online statistical source (the average spent by other businesses in the same line of work) to estimate his contract labor expenses. Similarly, in West v. Commissioner (2011), the taxpayer’s (“helpful”) children cleaned out his house and threw away old receipts while he was in the hospital. When the IRS caught up with him for six years of unpaid taxes, he was only able to produced receipts for the last two years, but the tax court allowed him to estimate his business expenses for the other years by using the average of the years he did document.
On another message board, other users accused me of ‘crashing’ their computers when they attempted to load a very large file I had linked. Wanted to blame me for having to get a new harddrive…Maybe the director was one of them…a secret author, bantering with fellow authors.
Yes, both of the almost entirely manufactured scandals you mention are exactly like a documented attempt by the Nixon White House to spy on the opposing political party. Well spotted.
Meanwhile, are you aware that your choice of screen name might tend to make people think you are less than objective when it comes to commenting on political matters?
Right, and I’ve represented clients in cases where this was the best we could come up with. I don’t want to derail the thread with the finer points of audit documentation and procedure, but I will say that the big problem with “reasonable” any time you see it in tax law is that the client and the auditor rarely agree on what that word means.
The Republican party doesn’t have to be credible for scandals to stick. If anything, the Republican party has finally found a foil that the public trusts less than the Republican Party.
The point is that the focusing on the Republicans’ response to scandals misses the point. Whether scandals stick or not has never relied on the opposition party.
True. This one, if anything, was manufactured by Lois Lerner. She broke the scandal in an attempt to be the first to frame the issue. What she said was absolute balderdash, and as you know, the cover up is always worse than the crime.
Now we’ve got the National Archivist saying the IRS broke the law by not informing the National Archives that they lost the emails. So now it’s looking like an unskilled coverup. They failed to cover all their bases.
Great, I hope your side brings up impeachment charges again and uses these “scandals” in 2016. Anything to help the Democrats win the White House again.