In Scott Chrush v. Commissioner, T.C. Memo 2012-299, October 25, 201, the Tax Court upheld the IRS’s disallowance of deductions for a real estate consultant. He wasn’t able to substantiate his deductions. He did provide copies of receipts, but had no books or records and didn’t adequately explain the business purpose for the expenses, and many of the receipts were illegible.

He also wasn’t able to substantiate his home office expenses.

This case illustrates the importance of keeping good records, although the result seems harsh considering he produced copies of receipts and a bookkeeper had helped him assemble his tax information.

The result might have been worse than it otherwise would have because the taxpayer represented himself instead of hiring a lawyer to represent him.

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