Although we have scoured Appellate Division decisions from the past quarter, we can find few words of consolation for our readers on Tax Day. The best comfort we can offer is that our readers are probably in a better position than Rafael Rodriguez, the proprietor of Alvin’s Wine & Liquor Inc. in the Bronx.
As described in a recent Third Department decision,1 Mr. Rodriguez explained to the tax authorities that he did not have any cash register receipts for the daily sales activities of his business because he tracked those transactions “in [his] head” by counting the money on hand at day’s end. Since an indirect audit found the business’ purchases to be more than triple its reported gross sales, the Third Department took a dim view of the cash-register-in-your-head method of accounting and upheld the Tax Appeals Tribunal’s finding of fraud.
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