Maine Bill to Help Fight Against Tax Evasion
- Feb 7, 2012 | Susan McLain
UPDATE: 4/4/2012 LD 1764 was signed into law, making the use of tax evasion devices a Class C or D crime.
Maine Representative Seth Berry (D) has sponsored LD 1764 to modify the law so that “tax zapper” software is prohibited. Tax Zapper’s are “…automated sales suppression devices, commonly referred to as ‘zappers’ and ‘phantom-ware,’…used to underreport sales and ….[enable] fraud and theft from government, from shareholders and business partners and from other state and federal taxpayers.”
The issue came to the attention of the state legislature when "...the Province of Quebec, on Maine's northern border...found that in one recent year it lost approximately $425,000,000 to fraud from zappers and phantom-ware in restaurants alone."
This bill is presented as an “emergency preamble” so that it becomes effective upon approval. The bill is intended to more clearly define that “…possession of automated sales suppression devices, which alter the amounts of sales made by a business for the express purpose of illegally withholding or skimming sales taxes paid by customers,” is prohibited.
The bill makes it clearly illegal for vendors to use the devices and provides for “…those persons who correct and fully report any previously underreported sales records before September 1, 2012,” to receive a reduction in penalties but not a reduction in other financial liabilities from the underreported sales records.