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ZAPPED!
February 26, 2008
The TaxProf calls our attention to a novel use of technology for tax evasion: the "Zapper." No, it's not the purple lights that entice insects to a gruesome fiery death in the backyard. It's a software add-on to a point-of-sale accounting program that automatically skims and diverts cash receipts to other causes - like financing terror, for example.
The most notorious use of the Zapper has been the "La Shish" tax evasion case, where a husband and wife diverted $20 million of restaurant proceeds to the Hezbollah terror group. A Google search indicates that zappers are also a serious problem in Canada, with its GST national sales tax (take note, Fair-taxers). Some headlines from the Great White North:
Celine Dion-owned restaurants raided by Revenue Quebec
Quebec tests tool to halt tax evaders
Restaurant industry targeted. Province estimates use of 'zapper' software costs hundreds of millions of dollars a year
It's a much more sophisticated version of the traditional restaurant skimming technique of never closing the cash register drawer.
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Comments
Joe:
Thanks for picking up the zapper paper. I have another one in the works that considers the factory installed versions that I have been calling "phantom-ware."
There is quite a bit here, and I am proposing an extension to the SSUTA to deal with it.
Richard
Posted by: Richard T. Ainsworth | April 28, 2008 8:36 AM
Richard, it's an interesting topic, and I look forward to your future work on it.
Posted by: Joe Kristan | April 29, 2008 7:19 AM