The observation test audit method was upheld against a restaurant taxpayer, who failed to provide any books or records for the audit. When the taxpayer did not provide sufficient records, the auditor notified the taxpayer that an observation test would be conducted instead. In this test, the auditor observed all sales made during one day from opening to closing. Although the taxpayer disagreed with the estimate and contended that records were available, no records were ever presented. Therefore, the judge determined that the observation test audit was appropriate in the given situation. However, the amount of tax due was reduced because the judge decided that the cash to credit card ratio used was not the most reasonable method for this audit. (Cjefa Pizza, Inc., New York Division of Tax Appeals, Administrative Law Judge Unit, DTA No. 821644, January 8, 2009)