BNA’s Michael J. Bologna and Paul Shukovsky have written a comprehensive article about a pervasive problem facing state tax auditors: the use by restaurants and other cash-intensive businesses of electronic revenue suppression software, commonly referred to as “Zappers.” We have previously blogged about efforts by state and federal tax authorities to crack down on the use of “Zapper” software here (reporting on the Connecticut Department of Revenue’s arrest of a New Haven restauranteur) and here (predicting a federal crackdown on tax zapper software). In their article, entitled “Tax-Zapping Software Costing States $21 Billion,” Messrs. Bologna and Shukovsky note that the use of revenue suppression software by businesses costs states a whopping $21 billion in lost tax revenue. In a related article, entitled “Zapper Fraud Case Results in Mandatory Real-Time Monitoring,” the authors describe the recent prosecution of a Bellevue, Washington restaurant owner which resulted in a “first-in-the-nation settlement requiring continuous monitoring by the state for five years,” the first time any state has ever required monitoring to resolve charges involving the use of “Zapper” software.
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