Manuel and Margaret Karcho - Page 19

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               We accord little weight to this testimony.  Only Mr. Karcho            
          testified that the malfunctions of the token machines or the                
          manual release of tokens resulted in the meters recording the               
          insertion of cash when it did not occur; no other witness                   
          corroborated this point.  As for the use of business cash to                
          obtain tokens for private parties, the employee who corroborated            
          this practice worked at the arcade for no more than 4 months of             
          the 46 months5 covered by respondent’s income adjustments, and              
          the practice only occurred on those weekends when Mr. Karcho was            
          not present.  We are satisfied in the circumstances of this case            
          that the Meter Readings Sheets are a reasonably accurate record             
          of Banner’s gross receipts for the years at issue, which is                 
          sufficient to sustain the deficiency determination.  Respondent’s           
          reconstruction of petitioners’ income need only be reasonable;              
          precision is not required.  See Harbin v. Commissioner, supra;              
          Campise v. Commissioner, T.C. Memo. 1980-130.                               
               The probability that the Meter Readings Sheets are                     
          reasonably accurate is enhanced by other factors.  The higher               
          gross receipts reflected on them provide a plausible explanation            
          of the source of the substantial cash that Mr. Karcho had at his            
          disposal during the years in issue.  Mr. Karcho’s explanation for           

               5  No adjustments were made with respect to the last 2                 
          months of Banner’s fiscal year ended Feb. 28, 1991, due to the              
          absence of Meter Readings Sheets covering that period.                      

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