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Restaurant Owners Use Zapper To Cook the Books
Hugh Pickens passes along a NYTimes report on software programs called "zappers," which allow even technologically illiterate restaurant and store owners to siphon cash from computer cash registers to cheat tax officials. In the old days, restaurant owners who wanted to cheat kept two sets of books. But because cash registers make automated records, hiding the theft requires getting into the machine's memory and changing that record. "...the Canadian province of Quebec may be the world leader in prosecuting zapper cases. Since 1997, zappers have figured in more than 230 investigations, according to the tax collecting body Revenu Québec... In making 713 searches of merchants, Revenu Québec found 31 zapper programs that worked on 13 cash register systems. Only two known zapper cases have been prosecuted in the United States... The cash register security industry is focused on protecting patrons and owners from theft by employees, which may be one reason so few zappers are uncovered in the United States. No one hires security experts to protect the government from devious businesses... As hard as zapper software is to detect, it is easy to make, said Jeff Moss, organizer of the annual hacker convention Def Con. 'If it runs on a Windows system and you are a competent Windows administrator, you can do it,' he said."
Most POS hardware I've seen run Windows. Before that it was OS/2 IIRC.
While an income tax was created during the Civil War, and various income taxes were created after the Civil War, this stopped after 1895, when income taxes were essentially ruled unconstitutional.
The constitutional amendment allowing income taxes was the 16th amendment, ratified in 1913. So, it's technically Taft's fault.
Note: Basically all information in this post comes from Wikipedia.
I've been asked by two retailers to reduce the amount reported by the point of sale software I was writing. One of them tried to tell me that because he owned the business it wasn't illegal. I told him that I'd just finished writing an enforcement system for Customs and Excise and would he like me to have them contact him to explain the situation?
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E_NOSIG
Until about 20 years ago, Québec had no sales tax on restaurant meals under a given amount (something on the order of $3.50 -- often, waitresses made two invoices below the cuttoff amount so the client would not be charged taxes). So, light lunches eaten by little worker bees would not be taxed but heavy business lunches eaten by fat executives would be.
Eventually, some very senior bureaucrat very high up in the revenue department became pissed that his premium restaurant food would be taxed and not the lowlives below him in the civil service food chain, so he rescinded the tax exemption for cheaper proletarian meals, which actually failed to bring significant additional revenue, given the extra administrative costs.
This put a bigger burden on smaller restaurants, effectively throwing some out of business, and the non-touristic restauration industry has yet to recover from that downset. So the zapper software came into existence.
Those programs would simply slog through the transactions of the day, discarding most who were paid cash, and had no alcohol (because alcohol sales also have to be tallied precisely).
Don't laugh: it's already been done:
And the alteration of the computer records is also prohibited.
Currently the retailer does need to pay sales taxes to any state where they have a physical presence, or "nexus."
Use tax is paid at the rate of the purchaser's home state.
If you have a "nexus" in the customer's state, you pay the rate in the customer's state.
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"That's probably the most ridiculous thing I've ever read on slashdot"
GP is perhaps less crazy than you think. Warren Buffet (the 2nd wealthiest man in the world, in case you didn't know) has frequently claimed that he pays, if not a lower dollar amount, a significantly lower percentage of his income in taxes than his secretary and other employees because of a major discrepancy between capital gains and income taxes; to his credit, he believes this to be wrong and advocates serious tax law reforms to at least fix glaring holes like that one.
By and large, tax fraud is a crime of wealth because the poor simply don't have enough money to either accomplish it or seriously gain from it.
Try not to take me more seriously than I take myself.
The rich pay for over 80% of our taxes.
Yes, that's a consequence of the distribution of wealth following a Pareto distribution.
My only political goal is to see to it that no political party achieves its goals.