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Full-Text Articles in Law
Taxing & Zapping Marijuana: Blockchain Compliance In The Trump Administration Part 4, Richard Thompson Ainsworth, Brendan Magauran
Taxing & Zapping Marijuana: Blockchain Compliance In The Trump Administration Part 4, Richard Thompson Ainsworth, Brendan Magauran
Faculty Scholarship
This is the fourth of a five-part series dealing with the rescission by U.S. Attorney General Jeff Sessions of the Obama-era policy that discouraged federal prosecutors from bringing charges in all but the most serious marijuana cases.
This article focuses on retail-level frauds. It proposes a limited purpose crypto currency. At the retail level the MJ Freeway or METRC software essentially functions as a marijuana-industry-specific point of sale (POS) system. It is common in retail for different industry sectors (restaurants, hotels, convenience stores, or gasoline stations) to have market-specific POS systems that are molded to fit the unique characteristics of …
Zappers, Phantomware And Other Sales Suppression Software In The State Of Washington, Richard Thompson Ainsworth, Robert Chicoine
Zappers, Phantomware And Other Sales Suppression Software In The State Of Washington, Richard Thompson Ainsworth, Robert Chicoine
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Electronic sales suppression (ESS) is a fraud that has been a (prominent) feature of the North American retail business since at least 1996. The first EES case in the US dates from 1981. ESS is a global problem. Depending on the jurisdiction, and the research study consulted, ESS is estimated to be present in 34% (of Canadian), 50% (of German – two studies), and 70% (of Swedish and Slovenian) businesses. It may be the case today, that “you cannot leave home without” encountering (or participating in) ESS.
The most common types of sales suppression technology are Zappers and Phantomware programming. …
The Technology Requirements Of The First Electronic Monitoring Agreement In Us For Zappers, Phantomware, And Other Sales Suppression Devices, Richard Thompson Ainsworth, Robert Chicoine
The Technology Requirements Of The First Electronic Monitoring Agreement In Us For Zappers, Phantomware, And Other Sales Suppression Devices, Richard Thompson Ainsworth, Robert Chicoine
Faculty Scholarship
On August 30, 2017, a plea was entered in the case of case of State of Washington v. Wong, Wash. Super. Ct., No. 16-1-00179-0, and as a result the first electronic monitoring agreement of sales transactions in the US (the “Monitoring Agreement”) was legislatively imposed on a retail business.
The Monitoring Agreement was negotiated between the State of Washington Department of Revenue (the “WA DOR”) and the taxpayer over a period of several months and is comprised of two parts: the basic agreement, which covered the obligations and rights of the parties, and an appendix, which defines the scope of …
Zappers - Technological Tax Fraud In New Hampshire, Richard Thompson Ainsworth
Zappers - Technological Tax Fraud In New Hampshire, Richard Thompson Ainsworth
Faculty Scholarship
No other State is as vulnerable to Zappers as is the State of New Hampshire. Zappers and related software programming, Phantom-ware, facilitate an old tax fraud – skimming cash receipts. In this instance skimming is performed with modern electronic cash registers (ECRs). Zappers are a global revenue problem, but to the best of this author’s knowledge they have not been uncovered in New Hampshire. Seen from a global perspective however, it seems unlikely that they are not here.
New Hampshire’s fiscal vulnerability to Zappers comes from its heavy reliance on precisely the industry segment that has been found to be …
Sales Suppression As A Service (Ssaas) & The Apple Store Solution, Richard Thompson Ainsworth
Sales Suppression As A Service (Ssaas) & The Apple Store Solution, Richard Thompson Ainsworth
Faculty Scholarship
The problem of sales suppression fraud is estimated to cost state and local governments $20 billion annually ($2 billion in New York restaurants alone). Modern sales suppression (skimming) is carried out with technology (Zappers and Phantom-ware). Nine undercover sting operations in and around Manhattan and the Bronx by investigators working for New York’s Department of Taxation and Finance (NY-DT&F) have identified the SSaaS variant of modern skimming.
A striking example of SSaaS may be unfolding in the $1 million sales suppression case against Congressman Michael Grimm (R-NY). It is alleged that Grimm skimmed sales from his Healthalicious restaurant in Manhattan, …
Zappers - Retail Vat Fraud, Richard Thompson Ainsworth
Zappers - Retail Vat Fraud, Richard Thompson Ainsworth
Faculty Scholarship
Zappers skim cash sales at retail. Zappers are add-on programs used by merchants with electronic cash registers (ECRs) or point-of-sale (POS) systems. Zappers are smart and selective. They do not skim all sales, and they never skim credit card transactions.
Although they are present in every jurisdiction, Zappers appear to be most widely used in developed economies that combine high levels of cash sales with high rates of consumption tax. Sweden, for example, has a cash-intensive economy, one of the world’s highest VAT rates (25%), and also reports that 70% of the ECRs in the country are either “… constructed …
Tax Fraud In The Sales Tax: Zappers -- What Are They? How Can Puerto Rico Block Them?, Richard Thompson Ainsworth
Tax Fraud In The Sales Tax: Zappers -- What Are They? How Can Puerto Rico Block Them?, Richard Thompson Ainsworth
Faculty Scholarship
The Sales and Use Tax is an essential part of Puerto Rico’s revenue profile. Effective only recently (November 15, 2006) the Impuesto a las Ventas y Uso (IVU) was expected to raise between $2.3 and $1.05 billion annually, and has already become the Commonwealth’s fourth largest revenue source. Actual revenue results for 2007-2008 came in at $1.1 billion, which admittedly is closer to the low end than the high end of what is possible, but now that the tax is in place the next pressing question is how can its performance be improved?
This paper generally proposes that Puerto Rico …
California Zappers: A Proposal For The Commission For The 21st Century Economy, Richard Thompson Ainsworth
California Zappers: A Proposal For The Commission For The 21st Century Economy, Richard Thompson Ainsworth
Faculty Scholarship
California has not uncovered a single instance of technology-assisted cash skimming - there are no zappers, and no phantomware in California. Is this because Californians are not skimming cash sales with technology, or is this because the California technology works so well that the fraud cannot be detected?
The record in foreign jurisdictions is reasonable clear. Automated sales suppression technology is widely used to skim cash sales, denying the state revenues from consumption taxes that have been paid by the consumer, reducing taxable business profits, and funding a cash hoard out of which unreported employee wages are paid. Government studies …