State cracks down on high-tech tax cheats

Capital News Service
LANSING — Michigan is cracking down on tax cheats in cash-based businesses that use high-tech software to evade taxes as part of its effort to fight fraud and increase state revenue. Zapper, an automated sales suppression device, and software known as “phantom-ware” enable businesses, especially those that mostly deal in cash, to underreport taxable sales by plugging a flash drive into their cash registers. Zappers have been found in Germany, Sweden, Brazil, Australia and France. Detroit has the earliest records of high technical tax cheating prosecution in the U.S, according to a Senate Fiscal Agency analysis. A new law signed by Gov. Rick Snyder prohibits phantom-ware and zappers and provides an opportunity for Michigan to collect more tax revenue, according to the Treasury Department.