Legal Dictionary of Pakistan

Cohan rule

Tax. A former rule that a taxpayer may approximate travel and entertainment expenses where no records exist if the taxpayer has taken all possible steps to provide documentation. ( Since 1962, travel and entertainment expenses have been only partly deductible and must be carefully documented, but courts may apply the Cohan reasoning to other items. Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930).