Alexandre v. Commissioner of Revenue Services, 22 A.3d 518

Yvon J. Alexandre operates a Hartford nightclub and banquet facility subject to sales and use taxes.
Audit period: October 1, 1999, to March 31, 2005; initial visit December 20, 2001, with extension of statute of limitations requested.
During the audit, Alexandre provided daily reports with attached Z tapes (summary of totals) but did not retain detailed cash register tapes of individual transactions.
Auditor used an industry standard markup method to compute audited gross receipts due to missing detailed records, leading to a deficiency request and penalties.
Jeopardy assessment and a property lien were issued; after hearings, penalties were partly waived and the court found the jeopardy assessment improper, yet tax liability remained.
Alexandre appealed, challenging the adequacy of Z reports as substitutes for detailed tapes and the remedy for the contested jeopardy assessment; the trial court sustained part of the appeal and the defendant appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are Z reports adequate cash register tapes under 12-2-12(b)(1)?	Z reports are cash register tapes that meet recordkeeping requirements.	Detailed cash register tapes are required; Z reports alone are inadequate.	Z reports are not adequate; detailed tapes required; auditor may use alternative methods.
Did the court properly allow an alternative audit method due to inadequate records?	Alternative methods are permissible only if records are inadequate.	Recordkeeping failures justify alternative auditing.	Yes; the court properly permitted the industry standard markup method when detailed tapes were not retained.
Was the jeopardy assessment properly imposed?	Jeopardy assessment was improper given assets and standing; lien relief sought.	Jeopardy assessment upheld as necessary for collection.	The trial court found the jeopardy assessment improper; the appellate court did not reach related lien relief due to procedural posture.
Should the court address the lien relief claim on appeal?	Lien should be discharged or voided as part of remedy.	Lien relief not properly before the court on appeal.	Claim not properly before the court; declined due to procedural deficiencies.

Leonard v. Commissioner of Revenue Services, 264 Conn. 286 (2003) (records inadequacy supports audit against taxpayer; de novo standard)
Matter of Licata v. Chu, 64 N.Y.2d 873 (1985) (test period/markup audit when records show only totals)
Matter of Raemart Drugs, Inc. v. Wetzler, 157 A.D.2d 22 (1990) (summary tapes adequate where essential records exist)
McDonald's of Springfield, Ohio, Inc. v. Kosydar, 43 Ohio St.2d 5 (1975) (cash register tapes inadequate when no itemized detail)
National Delicatessens, Inc. v. Collins, 46 Ohio St.2d 333 (1976) (cash register tapes inadequate when totals omit taxable breakdown)