- 14 -
having generated the first Z reading on such a tape, Mr.
Katerelos correctly reentered all the transactions that had thus
far occurred for the day15 and entered additional transactions as
they occurred during that day. Thereafter, on that same day, Mr.
Katerelos activated the Z mode a second time to generate the
second Z reading on the cash register tape that he saved for the
day. Mr. Katerelos recorded in the gross receipts journals the
total sales from the second Z reading for the day as the amount
of NDV's gross receipts for that day.16
During the years at issue, Irwin Berlat (Mr. Berlat),
petitioners' accountant,17 used the daily amount of gross re-
ceipts of NDV that Mr. Katerelos had recorded in the gross
receipts journals for those years in order to calculate the
amounts of NDV's monthly18 and annual gross receipts for those
years. In addition to giving Mr. Berlat the gross receipts
15 It usually took Mr. Katerelos five to ten, and not more than
30 minutes, to reenter those transactions.
16 Mr. Katerelos treated the total sales from the first Z read-
ing as if it had been an overring (even if it was not) in that he
did not include it in the amount of NDV's gross receipts that he
recorded for that day in the gross receipts journal.
17 Mr. Katerelos employed Mr. Berlat as the accountant for NDV
when Mr. Berlat's father, who had been performing that function,
died. Although it is unclear from the record when Mr. Berlat's
father died, it appears that he may have passed away during 1987.
18 Following the close of each month during each of the years at
issue, Mr. Berlat visited the premises of NDV, obtained the gross
receipts journal from Mr. Katerelos, and calculated from that
journal the amount of NDV's gross receipts for the month just
ended.
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