Look Out, Tax Zapper Users: Feds Join State-Level Crackdown

August 23, 2018ArticlesLaw360By Matthew D. Lee Two weeks ago federal prosecutors announced criminal tax charges against the owners of five Chicago-area restaurants as part of an ongoing federal investigation into the underreporting of gross receipts using sales suppression software. The charges allege that the defendants willfully avoided paying the full amount of federal taxes by reporting gross receipts that were substantially lower than the true amounts. This case appears to be the largest and perhaps most significant federal criminal case to date against businesses that use sale suppression techniques to conceal revenue from tax authorities. Commonly called “zappers,” sales suppression software programs run on a point-of-sale computers or cash registers and are used to secretly delete some or all cash transactions. The result is that the company’s books appear to be complete and accurate but are in fact false because they reflect fewer sales than were…

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