When the $75 rule applies, you don’t need a receipt.

The problem with this rule is that it is often thought to apply to all tax deductions. That’s wrong.

Now, think of the taxpayers who incorrectly apply the $75 rule to all of their tax deductions. They are exposed to a massive loss of deductions and likely some penalties too.

The $75 Rule

IRS Reg. Section 1.274-5(c)(2)(iii) contains the $75 rule.1 Notice 95-50 contains a clear explanation of what the $75 rule applies to.2 ... Log in to view full article.