The “Tax Zapper” software program allows a business to underreport their sales to illegally lower their tax bills. The Tax Zapper program is sold by Profitek, a Canadian company selling point of sale systems for hospitality and retail industries.
The Tax Zapper is a revenue suppression software that is used to modify a business’ point of sale database for the purpose of tax evasion. Essentially, the revenue suppression software deletes some or all of the business’ cash transactions and then reconciles the books of the business. The books of the business then appear to be honest and accurate.
However, they are false and fraudulent because they show less than the total amount of income earned and allows the business owner to pocket the cash. John Yin, a software salesman from Everett, Washington, recently pleaded guilty in the U.S. District Court in Seattle, admitting that he promoted and sold revenue suppression software that allowed restaurants to underreport their sales and to illegally lower their tax bills.
Not only did businesses that used the Tax Zapper program cheat their sales tax obligations, it also let those employers pay cash to their employees, thereby allowing the employers to sidestep the payment of Social Security taxes which ultimately victimized their workers.
Yin sold the Tax Zapper software to dozens of customers who then underpaid their state and federal taxes ranging from a low of $145,000.00 to more than $910,000.00. Yin pleaded guilty to wire fraud and conspiracy to defraud the government. Wire fraud is punishable by up to 20 years in prison along with a fine in the amount of $250,000.00. Conspiracy to defraud the government is punishable by up to 5 years in prison along with a $250,000.00 fine.
In pleading guilty, Yin agreed to pay $3,445,589.00 in restitution to the United States and Washington State and agreed to pay for the costs of prosecution. Yin will be sentenced on February 24, 2017. What do you think?
Are you in trouble with the IRS? You need a tax attorney! Contact Chicago tax lawyer Patrick T. Sheehan & Associates today.