Posts Tagged ‘zappers’

Tax Roundup, 10/17/2012: Zappers!

Wednesday, October 17th, 2012 by Joe Kristan

Flickr image courtsy rust.bucket under Creative Commons license

Zappers rampant?   A representative of a company that works with sales tax collectors says that the use of tax-evading “zapper” software is rampant, according to a Tax Analysts article ($link).  No, frying bugs doesn’t help avoid taxes.  The article describes zappers:

Zappers are sales-tax-skimming software often loaded onto memory sticks, CDs, and memory keys, or downloaded from the Internet. Virtually undetectable, the devices are used to eliminate whole transactions or parts of transactions from cash registers and in turn reduce the amount of sales tax known to be owed.

Zappers have received a lot of attention in Canada, where Quebec revenuers required a technical fix, described by CGI representative Bryce Berg as an “ultra-secure” microcomputer that plugs into cash registers:

 Quebec required each of its 18,000 restaurants to install the modules in their 30,000 cash registers, Berg said, adding that in the first year the province saw an additional $160 million in revenue from voluntary sales tax compliance.

It would be surprising if sales tax chiselers in the U.S. were any less creative than those in Canada.

Related: ZAPPED!


More refunds for Des Moines?  The City of Des Moines, already reeling from a court order to refund $40 million of illegally-collected utility taxes, now may have to repay a $15 million federal grant used to build the Seventh Street Park-and-ride garage.



Brutal Assault on Reason Watch: 

TaxGrrrl,  Did The Debates Offer Enough ‘Hope and Change’ for the Obama/Biden Ticket?  She also live-blogged last night’s debate.

Linda Beale,  Romney shows he’s a “know-it-all” who has no real ideas at all

Daniel Shaviro, Cynicism and dishonesty in tax reform debate (although, perhaps, what else is new?)


Richard Morrison,   Chart of the Day: Millionaire Status is Fleeting  (Tax Policy Blog):

Paul Neiffer,   2013 Social Security Changes:

Remember that the Medicare surtax on earnings in excess of $200/$250,000 per year will apply beginning January 1, 2013.  Therefore, the Medicare tax on earnings in excess of those amounts will be 3.8% (split 50/50 between employee and employer).

Janet Novack,  Social Security Benefits To Rise 1.7%; Workers Face Up To $2425 Payroll Tax Hike


TaxProf,  WSJ: Taxpayers Will Lose Twice if Bankruptcy Court Allows Solyndra Insiders to Harvest $975m of NOLs

Kay Bell,   Will popular but costly tax breaks end?

Jason Dinesen,  Would a Name Change Help Enrolled Agents? Part 3

And yes, EAs ourselves bear some responsibility. We need to be less crabby and resentful of CPAs and embrace the uniqueness of our designation.

When I give presentations, I always include a slide at the beginning where I talk about my designation. One of the bullet points on the slide says, in bold words: “I don’t work for the IRS!” This helps break the ice and often draws chuckles from the audience.

Jason never seems crabby.  Robert D. Flach, maybe, but he’s not an enrolled agent.

None of that sounds good.  Do you have any specials today?   Which Do You Prefer: Income Tax, Earned Income Tax, Sales Tax, Property Tax? (Jim Maule)

It’s Wednesday,  so Robert D. Flach is Buzzing!

Tax trouble for Russ Fox!  No, not the tax one.  The fish and chips one.


Tax Roundup, 4/4/2012

Wednesday, April 4th, 2012 by Joe Kristan don’t you dare give the bank the client’s return with only oral permission, because that would be unauthorized disclosure: “TIGTA: IRS Is Not Monitoring 34% of its Servers, Putting Taxpayer Data at Risk” (TaxProf).

Pennies on the dollar for late-night cable operators: “TaxMasters Leaves CNN, Fox News, MSNBC Holding Empty Bag” (Janet Novack)

Gee, who didn’t see this coming?  Iowa jacks up its cigarette taxes.  Taxpayers respond creatively.  Iowa tries to close the “loophole.”  Taxpayers will respond creatively again.  (Radio, via

Deducting that home office?  Jason Dinesen warns us to Beware of Depreciation Recapture on Home Office Deduction.

“Zappers” aren’t just a Canadian thing anymore: States target tax fraud software.

The tax fraud bet didn’t work out:Northridge woman gets 18 months for tax fraud.”  The story quotes the prosecutor saying “She’s someone who liked to go to Las Vegas.”

Harold Hill would approve: Alabama Education Funding Diverted to Pay for Film Incentives. (Tax Policy Blog)  UPDATE: Not that education there necessarily deserves funding.

It’s a long way down from Patty Hearst and O.J. Simpson: F. Lee Bailey as Lionel Hutz (Anthony Nitti).


Zapper Zapped

Friday, November 19th, 2010 by Joe Kristan

There are some technologies that the IRS doesn’t appreciate at all. High in the IRS black book of bad modernity is “zapper” software, which is software designed to hide from the IRS revenues recorded in other accounting software. The IRS displayed its feelings in this Justice Department press release:

WASHINGTON – Theodore R. Kramer pleaded guilty to one count of conspiracy to defraud the United States before U.S. District Court judge John Corbett O’Meara in Detroit, the Department of Justice and Internal Revenue Service (IRS) announced today. The court set sentencing for March 15, 2011.
According to court documents, Kramer was a self-employed computer software salesman. Kramer sold a computer software program called Journal Sales Remover (JSR) to business, including two Detroit-area strip clubs. JSR’s design was to remove a portion of a business’s sales from the business’s computerized books. JSR thus created the appearance that a business received less income than it actually did.
In 2001, the owner of two Detroit-area strip clubs requested that Kramer load the JSR program onto his clubs’ computer systems so that the club owner could report less income to the IRS. From about 2001 to about 2004, Kramer periodically visited the clubs to run the JSR program to remove a substantial amount of the clubs’ sales from their computers. The club owner then provided the reduced sales figures to his accountant. With Kramer’s assistance, the club owner understated his clubs’ gross receipts by more than $500,000.
Kramer faces a maximum sentence of five years in prison.

It seems that IRS investigators are quite familiar with strip clubs.