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Restaurant Owners Use Zapper To Cook the Books

kdawson posted about 6 years ago | from the new-twist-on-an-old-scam dept.

The Almighty Buck 454

Hugh Pickens passes along a NYTimes report on software programs called "zappers," which allow even technologically illiterate restaurant and store owners to siphon cash from computer cash registers to cheat tax officials. In the old days, restaurant owners who wanted to cheat kept two sets of books. But because cash registers make automated records, hiding the theft requires getting into the machine's memory and changing that record. "...the Canadian province of Quebec may be the world leader in prosecuting zapper cases. Since 1997, zappers have figured in more than 230 investigations, according to the tax collecting body Revenu Québec... In making 713 searches of merchants, Revenu Québec found 31 zapper programs that worked on 13 cash register systems. Only two known zapper cases have been prosecuted in the United States... The cash register security industry is focused on protecting patrons and owners from theft by employees, which may be one reason so few zappers are uncovered in the United States. No one hires security experts to protect the government from devious businesses... As hard as zapper software is to detect, it is easy to make, said Jeff Moss, organizer of the annual hacker convention Def Con. 'If it runs on a Windows system and you are a competent Windows administrator, you can do it,' he said."

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Physical access = carte blanche (5, Insightful)

eggman9713 (714915) | about 6 years ago | (#24836067)

Just one more example of how physical access to a machine can often circumvent any sort of software based security.

Re:Physical access = carte blanche (5, Funny)

Repton (60818) | about 6 years ago | (#24836281)

The government must act quickly to stop this reprehensive tax evasion. I see only one solution: federally-mandated DRM on all cash-registers. We'll use TPM to lock these things right down to the hardware! Of course, there must be no paper backup, otherwise corrupt storekeepers would "accidentally" break their machines so that they can supply the hard-working patriots at the IRS with doctored false receipts.

To implement this, we'll need someone reliable, someone with a proven track record in securing embedded systems... Someone send a briefing paper to Diebold immediately!

Re:Physical access = carte blanche (4, Insightful)

base3 (539820) | about 6 years ago | (#24836367)

You joke about the TPM thing, but I wouldn't be a bit surprised if that surfaces as a serious proposal, even if as just a safe harbor against being accused of cooking the books.

Re:Physical access = carte blanche (4, Informative)

Pig Hogger (10379) | about 6 years ago | (#24836447)

The government must act quickly to stop this reprehensive tax evasion. I see only one solution: federally-mandated DRM on all cash-registers.

Don't laugh: it's already been done [lavalnews.ca] :

The government's latest anti-zapper effort would oblige restaurants to connect an independent computerized device to their cash registers, making it more difficult to conceal or alter sales data.


Easier to track fraud

The machine records sales information, then stores it in a secure independent environment. Every sales transaction that is completed will have a unique digital signature, which will be printed on a bill with a bar code. It is hoped the measure will make it easier for Revenue Quebec to analyze sales data for tell-tale evidence of tax fraud. The government plans to implement the recorders as a pilot project with volunteer restaurant operators throughout the province, including Quebec City and Montreal, in November 2009 to determine that they work properly.
The following year, the device would then gradually be phased in over a 12-month period, following which all restaurant operators would be required to have it connected up. The government will be shouldering the cost of the machine itself, as well as for its installation. Revenue Quebec says the measures are being taken with the cooperation of the Quebec Restauranteurs Association, the Conseil des chaînes de restaurants du Québec, the Association of Hoteliers of Quebec and the Canadian Federation of Independent Business.

And the alteration of the computer records is also prohibited [gouv.qc.ca] .

Re:Physical access = carte blanche (0)

jeepien (848819) | about 6 years ago | (#24836821)

Quebec Restauranteurs Association

There is no "n" in the word "restaurateur". Did the newspaper really make that stupid error? I seriously doubt that the Quebec Restaurateurs Association would have.

Re:Physical access = carte blanche (5, Funny)

obarthelemy (160321) | about 6 years ago | (#24836795)

There was a case a few years ago, where the most widely used accounting/cash register software for hairdressers in France actually had a standard option to hide some cash from the tax authorities.

Couldn't find any links, sorry.

Yeah, and we should be surprised of this because? (0, Troll)

houbou (1097327) | about 6 years ago | (#24836083)

I can see why zappers are used, heck, before being a computer consultant, I, too, in my early years, worked in the food industry as a cook, so I know all about dual book systems :).

The taxmen are so greedy, one has to do what one can in order to keep afloat these days.

there would be a way to avoid this, but who am I to say it and spoil the fun! :)

Re:Yeah, and we should be surprised of this becaus (4, Insightful)

hedwards (940851) | about 6 years ago | (#24836251)

I don't know why you were modded insightful. This ought to have been modded -1 what the hell were you thinking.

The reason why the taxmen are greedy is because they know that a lot of people and businesses cook the books or otherwise defraud the government of taxes. The government spends a certain amount and in order to cover that there needs to be income. Ideally it comes from taxes but particularly in recent years there's a lot which is borrowed via bonds.

Now the problem is that restaurants and businesses which cheat on their taxes, not to mention individuals, get the same benefits that those that pay their share without having to pay all of the money due.

I'm not sure what the exact amount is, but the figure I've seen some fairly large numbers thrown around. I'm not sure what the real number is, I suspect that nobody really does, but it is a significant amount of money due to people like your former employers cheating the other taxpayers.

Re:Yeah, and we should be surprised of this becaus (-1)

Joebert (946227) | about 6 years ago | (#24836313)

So why don't we just determine a set of things that taxes will always cover, like health care & recreational parks, then get rid of taxes, print the money to pay for gevernment sponsored stuff, and only have the best and brightest people working in the government ?

Re:Yeah, and we should be surprised of this becaus (5, Insightful)

AuMatar (183847) | about 6 years ago | (#24836363)

The fact you suggested printing money to cover debts proves you wouldn't be one of those "best and brightest". Can you say rampant inflation? Study economics and history, particularly Weimar Germany. Beyond which, even if it wasn't bad economics it would be a poor idea- using taxes caps government spending by providing a maximum dollar amount, and makes the citizens aware of what it truly costs. These are good things.

Re:Yeah, and we should be surprised of this becaus (-1)

Joebert (946227) | about 6 years ago | (#24836455)

You assume frivolous things would be handled by government and included in the debt.

I'm talking about granting everyone certain things & leaving the rest up to capitalisim.

Re:Yeah, and we should be surprised of this becaus (5, Interesting)

kesuki (321456) | about 6 years ago | (#24836977)

"Study economics and current events, particularly Zimbabwe"

fixed that for you, weimar germany only printed massive amounts of money to repay war repartitions. modern Zimbabwe is printing massive amounts of 100 billion dollar bills to fund and supply their army which is in a protracted civil war with 2 large militia groups as a result of the African war in the Congo.

what happened in germany is minor compared to what Zimbabwe is doing, which is printing money, buying foreign currency and funding their entire army with foreign currencies. that would be like america going out printing 300 trillion dollars, buying euros, yen, etc from banks around the world and then 'using' that foreign non hyper inflated currency to repay the national debt. (yes i realize the national debt is only 9.65 trillion, but to get enough foreign currencies from foreign banks, at least 300 trillion us dollars would have to be printed, if not a few hundred quadrillion, it would be hard to sucker over banks, after the first few large cash transfers they'd start devaluing the dollar in proportion to the reported sizes of unexpected cash purchases)

eventually, if national debt out strips the pace at which our economy grows, the government is going to start using kooky plans to raise the available funds, however, it's pretty clear that we're in no immediate threat of the government pulling any tricks to try and repay debt. a couple lean decades of economic a serious recession, and continued tax cut and spend politics, and America might be in serious trouble finding enough people to buy their debt. for right now though, things aren't critical. although i find the amount of debt, and deficit growth sickening.

Re:Yeah, and we should be surprised of this becaus (1)

dunezone (899268) | about 6 years ago | (#24836387)

...what the hell were you thinking.

Ill tell you what he was thinking. He has a job, hes making a paycheck, hes living by that paycheck. He found it easier to just go along then to not go along. When Enron and all those companies started collapse in 2001/2002, the people that helped cooked the books knew what they were doing. But they kept their mouths shut cause they were getting paid to.

Point is, put a bag of money in front of someone and watch their ethics and morals go out the door.

Re:Yeah, and we should be surprised of this becaus (1)

SirLurksAlot (1169039) | about 6 years ago | (#24836483)

Ill tell you what he was thinking. He has a job, hes making a paycheck, hes living by that paycheck.

That doesn't excuse unethical behavior. We all have to make a living and the vast majority of us understand that there are consequences for our actions, even if those actions were taken to protect ourselves financially.

When Enron and all those companies started collapse in 2001/2002, the people that helped cooked the books knew what they were doing. But they kept their mouths shut cause they were getting paid to.

Yes, and we saw how well that worked out for the lot of them.

Point is, put a bag of money in front of someone and watch their ethics and morals go out the door.

As I said above, I think most people will choose to act ethically. IMHO I don't believe that "everyone has their price," but I could just be naive.

Re:Yeah, and we should be surprised of this becaus (1)

billcopc (196330) | about 6 years ago | (#24837007)

IMHO I don't believe that "everyone has their price," but I could just be naive.

As much as I wish there were any bit of integrity left in humanity, I have to say you're probably just slightly more naive than average. Those who cannot be bought, can be silenced via threats, which come in many forms, many of them 100% legal in today's environment.

"otherwise defraud" (0)

Anonymous Coward | about 6 years ago | (#24836403)

> otherwise defraud the government of taxes

I think you misspelled "the government cheats, lies, wastes, misappropriates, loses, scams, porkbarrels, or otherwise defrauds the restaurant of THEIR money". The government didn't make that money. The restaurant did, by providing goods and services that people were freely willing to pay for.

If the govt managed a small amount of everyone's money for the overall public good, say no more than 10%, that's one thing and I could believe that to be useful and reasonable. But I wouldn't even know how to overstate how far that is from what actually happens.

Re:Yeah, and we should be surprised of this becaus (2, Insightful)

houbou (1097327) | about 6 years ago | (#24836413)

In a perfect world, all would pay their taxes fairly and the taxes paid would benefit the people as a whole.

In this world, it's not happening. How to fix that? mmmm, simple answer, start all over. Bring the entire political and economic system down and reboot so to speak.

Will that happen? Maybe, maybe not, and certainly not in my lifetime anyways.

But it is what would be required. A clean slate for all, a true bill of rights for human, clearly defined laws which are above any religious practices and a new economy which would be based on that new bills of rights.

What could this bill be made of? the right for all humans to food, water, shelter, education.

What would the economy be like? simple, money as we know it would cease to exist.

As you look upon today's world, could such a goal be achievable? could we actually migrate to such a new system? YES.

How? in stage, obviously, it would take several generations to transit towards such a goal in order for this to be accomplished.

Why? Because many of the new concepts require a relearning of how to live, what to expect, how to interact with others, etc... So, for this to happen, a major part would be in the education that we provide to ourselves and our children, etc.., as they are the ones would continue the process in order to make it happen.

Sounds utopian? Why Not!!

Anything is possible to those who wish it.

How could this be possible? when we (humanity) realize that we are all the same deep down and we all want peace and prosperity, regardless or politics and religious beliefs.

What's the biggest hurdle?

  • Us the people, which is part being lazy and part resisting and fearing change, and
  • those who right now, are in power and truly benefit from this unfair world as it is.

Re:Yeah, and we should be surprised of this becaus (1, Flamebait)

creysoft (856713) | about 6 years ago | (#24836467)

Awesome communism troll.

Re:Yeah, and we should be surprised of this becaus (1)

CautionaryX (1061226) | about 6 years ago | (#24836753)

Ever look up Soviet Russia in the history books?

Re:Yeah, and we should be surprised of this becaus (1)

Billly Gates (198444) | about 6 years ago | (#24836797)

I used to think about this when I was a kid that money is the problem and people need to work for their own benefit.

I am grown up now and realized that this would never happen.

What your describing is the basis of communism and socialism and it has terrible side effects.

For one the head of state becomes a dictator as he or she holds the jobs which are your family's future in line. If you hate your current job you can quit or be fired and get another one in time. You can't if the state owns all the jobs. But without money this wont be a problem right? Well if I work at a store and only had a limited number of food and you and several others wanted whats left then who am I going to give it too? We have no shortages today as the owner of the store prices everything properly to keep supply down to those who need it and everyone has more. What if your neighbor overbought everything at the grocery store and left you with no food left?

This then creates the dictatorships found in communistic countries. You can argue that we all do not have to be like that but who is going to enforce everyone not to make money but a strong government has to enforce it. ... which leads us to the economic argument agaisnt communism. If money is taken away people do not work and food and goods are not amply delivered. Soviets had to wait hours in line to get things like Milk or pots or pans. This is because the laws of supply and demand dictate the correct amount of goods at the correct price and everyone benefits because we all want money [wikipedia.org] . Why would I want to get up at 5:30am everyday? If I had my choice I would not and who suffers? Not my employer but everyone who depends on me in society.

If things like housing and food did not have a limited supply we would not need to work or have money but since scarcities exist we need a system that rewards what the market wants by providing the correct work it most desires in the forms of higher salaries.

Re:Yeah, and we should be surprised of this becaus (4, Interesting)

timholman (71886) | about 6 years ago | (#24836473)

I'm not sure what the exact amount is, but the figure I've seen some fairly large numbers thrown around. I'm not sure what the real number is, I suspect that nobody really does, but it is a significant amount of money due to people like your former employers cheating the other taxpayers.

It's not that small business owners are natural crooks. They're just doing what they have to do to survive. If every small business owner paid all his taxes, the tax rate would be low. But if you cheat, and skim part of your income, the chances of being caught are practically zero as long as you're halfway careful. So of course, lots of people cheat, which gives them an advantage over their honest competition.

Consequently, the government raises its tax rates to compensate for the reduced revenue because of the cheaters. This puts the honest businesspeople at an even greater disadvantage. They have to start cheating, too, or they'd go out of business. So now we arrive at the present-day situation where every small business owner cheats, the tax rates are ridiculously high, and everyone plays a guessing game trying to figure out the minimum amount of revenue they can get away with reporting to the government.

It's certainly not a desirable situation, but that's how the game has to be played if you want to stay in business. I suspect the amount of revenue collected is roughly equivalent to what would be collected with lower tax rates and a completely honest citizenry. So the net effect is about the same to the government, but the game is fixed from the start.

Re:Yeah, and we should be surprised of this becaus (1)

geoskd (321194) | about 6 years ago | (#24836685)

Now the problem is that restaurants and businesses which cheat on their taxes, not to mention individuals, get the same benefits that those that pay their share without having to pay all of the money due.

I defy you to show me how the food-service industry benefits from welfare, or from defense spending. No matter who invades, they all gotta eat when the fighting is over. Maybe the US government should try spending less by:

1:) Stop invading foreign countries for no apparent reason.
2:) Stop giving hundreds of dollars a month to people who are too lazy to work for a living. Welfare may have a new cap on it, but you should take a look at how much the disability spending has increased vs the welfare spending decrease over the last ten years. All of those former welfare recipients now seem to have mental disabilities...
3:) Stop subsidizing stupid energy plans that cant work (See ethanol. If its viable, it'll be financially viable. If the government has to subsidize it, its a bad idea...).

Those are just a few ways to save a bunch of money instead of increasing taxes...

The point of this rant is that there are a huge number of government spending programs from which no-one derives any value, much less those who are paying the bills and maybe we should make a bigger effort to catch welfare and disability abuse than chasing semi-legitimate businessmen.

-=Geoskd

Fuck the govt (1)

ArchieBunker (132337) | about 6 years ago | (#24836967)

The govt pisses away money faster than people even begin to pay taxes. I look at this way. The govt has a problem with spending money, so you give them more money? No! Do you give drug addicts more drugs or alcoholics more booze? The more you pay the more you enable. Not to sound like V, but govts should fear the people, not vice versa.

Re:Yeah, and we should be surprised of this becaus (0)

Anonymous Coward | about 6 years ago | (#24836349)

The taxmen are so greedy, one has to do what one can in order to keep afloat these days.

You've seen nothing yet. Wait til Obama gets into office. You think socialist programs are cheap?

Windows? (1)

Anonymous Coward | about 6 years ago | (#24836089)

There are cash registers that run Windows? I would have thought that people would be smarter than that. I guess not.

Re:Windows? (3, Informative)

anss123 (985305) | about 6 years ago | (#24836103)

Most POS hardware I've seen run Windows. Before that it was OS/2 IIRC.

Re:Windows? (1)

chubs730 (1095151) | about 6 years ago | (#24836559)

Ours run OS/2 where I work (Stop and Shop)

Re:Windows? (1)

adamofgreyskull (640712) | about 6 years ago | (#24836653)

Windows has recently come to the fore, as it's what people know I guess. I've seen EPOS terminals running Windows, Linux and also XTerms pointed at Unix back-ends and I only worked in the EPOS world for about a year, and not that long ago. When I was in school, I worked at a major chain of chemists in the UK that was recently subject to a private takeover. When I worked there, they had a Unix backend and dumb IBM POS terminals. They still have the same UNIX backend, even though most POS terminals are running some variation of Windows as far as I can work out from my GF who still works there :)

Re:Windows? (5, Funny)

Anonymous Coward | about 6 years ago | (#24836695)

Most POS hardware I've seen run Windows.

POS can be interpreted in two ways here, and both of them are accurate.

Re:Windows? (1)

Pig Hogger (10379) | about 6 years ago | (#24836731)

Most POS hardware I've seen run Windows.

Well, Windoze, too is a POS...

Re:Windows? (1)

eggman9713 (714915) | about 6 years ago | (#24836123)

Where I used to work before I completed college, the registers ran windows but the backend server ran Unix. No idea why they didn't just do *nix all the way around, but meh, it was a job, and even though I was a techie, I didn't care as long as the register didn't crash, which only happened once.

Re:Windows? (1)

WK2 (1072560) | about 6 years ago | (#24836175)

There are cash registers that run Windows? I would have thought that people would be smarter than that. I guess not.

I was thinking the same thing. Except for the people smart part.

Most POS hardware I've seen run Windows. Before that it was OS/2 IIRC.

POS software and POS hardware go well together.

Where I used to work before I completed college, the registers ran windows but the backend server ran Unix. No idea why they didn't just do *nix all the way around

Some people think that Windows is better for desktops. Maybe the registers were on a desk?

Re:Windows? (2, Informative)

Anonymous Coward | about 6 years ago | (#24836681)

I used to work with a Windows NT based touch-screen restaurant cash register. I only left that job at the beginning of this year, so I doubt anything has changed. Friends still employed there have informed me that this was still possible as of last week.

While the POS software is running, any presses which might have an effect on system functioning were disabled. Maximize, Minimize, Close, Resize, anything like that was verboten. The lockout, however, was not quite infallibe.

If you rubbed your finger in the lower left hand corner for a few minutes, the start menu would inevitably pop up. It happened very infrequently by accident as well, which was how we happened to discover it.

Once you've got the start menu, things get wonky---you can interact with the start menu in any way requiring a single left click, including starting programs. Once you'd started a program, you could interact with it in the same manner; but the safeguards to prevent you from closing the POS software would also prevent you from closing whatever you'd opened.

More than once, the entire restaurant's transaction processing was shut down when someone either out of curiosity or malice opened, (and I have no idea why they left it installed,) Solitaire.

Management would come in, and find themselves unable to do anything but move cards around on stacks. They couldn't minimize or close it. These registers don't have keyboards or mice, so your only means of interaction is the touch screen. To compound the idiocy, one of the store's four registers was also the server, necessitating that if it were rebooted, every other register would have to be turned off, and only booted up again after the server had finished its boot process.

Which was about fifteen minutes long. And almost invariably involved a panicked call from the home office wanting to know what had gone wrong.

The final nail in the coffin was that the main-server-register, this all-mighty one which must not go down, was in the take-out room---open to customers and utterly ignored by management unless there was a complaint.

Since I'm posting AC, what the Hell: The systems in question were by POSitouch. They're in use in virtually every chain sit-down restaurant I've ever been to in the US, and a solid majority of the sit-down indepedents.

And they're practically a text-book case of what's wrong with using a full version of Windows as the OS on POS equipment.

Re:Windows? (2, Informative)

betterunixthanunix (980855) | about 6 years ago | (#24836229)

I have yet to see a modern, touch screen cash register not running Windows. Frankly, I don't understand why they wouldn't be running QNX or Minix, but whatever, I guess the people who deal with these things are too concerned...actually, according to TFA, they are probably glad it is not running a secure OS with tamper evident hardware.

Re:Windows? (4, Funny)

tepples (727027) | about 6 years ago | (#24836259)

There are cash registers that run Windows?

The cash registers have to run Wintendo [catb.org] . Otherwise, they can't use Nintendo peripherals such as the Zapper [wikipedia.org] .

Re:Windows? (1)

adamofgreyskull (640712) | about 6 years ago | (#24836985)

Perhaps this was meant to be modded funny, but...there's no reason why a POS system shouldn't run on Windows. Insecure programming you say? Because that never happens on GNU/Linux systems? Hah!

The problem is, what the article suggests, that business owners are able to circumvent the security on the POS terminals THAT THEY OWN, is in no way OS specific. If you have physical access to the system, you can fudge numbers however you like. This is no different to a restaurant owner having two physical paper ledgers, keeping one legit for the Revenue, and one for his own records. Or swapping out receipt rolls, or having two dumb, hardware only tills that are separate...or...or...

Maybe the windows angle is relevant because an Access or SQL Server DB is that much easier to open up in a visual editor...whereas a Pick/D3/Reality [wikipedia.org] database on GNU/Linux or Unix requires a certain degree of masochism to manipulate... :)

Good for the businessmen (0)

Anonymous Coward | about 6 years ago | (#24836105)

Cutting off the governments money is a moral imperative.

Re:Good for the businessmen (0)

Anonymous Coward | about 6 years ago | (#24836169)

No, getting back at Kent and Dr. Hathaway [imdb.com] is a moral imperative. Cheating on taxes is just greed.

Everyone cheats on income tax (0, Troll)

zymano (581466) | about 6 years ago | (#24836141)

Income tax = police state.

Why should the gov be looking through our stuff like registers?

Should they also have nosy investigator come to your house with cameras and video cameras to spy on you?

Everything the founding fathers DID NOT want.

Thanks Abe Lincoln you commy a-hole.

Re:Everyone cheats on income tax (1)

soast (690658) | about 6 years ago | (#24836205)

thats why the government does not want fair tax. fair tax = no control support fairtax http://www.fairtax.org/ [fairtax.org]

Re:Everyone cheats on income tax (4, Informative)

samcan (1349105) | about 6 years ago | (#24836215)

While an income tax was created during the Civil War, and various income taxes were created after the Civil War, this stopped after 1895, when income taxes were essentially ruled unconstitutional.

The constitutional amendment allowing income taxes was the 16th amendment, ratified in 1913. So, it's technically Taft's fault.

Note: Basically all information in this post comes from Wikipedia.

If it runs on X and you are a competent X admin (0)

Anonymous Coward | about 6 years ago | (#24836153)

Sure Windows might be more popular but I'm pretty sure it's got very little to do with this issue.

Windows is not the issue (1)

EmbeddedJanitor (597831) | about 6 years ago | (#24836241)

Except to show that it is easy to do. Most Average Joes can run a Windows program with very little outside help.

Re:Windows is not the issue (2, Insightful)

betterunixthanunix (980855) | about 6 years ago | (#24836289)

The real solution to this problem, the only solution that could ever be enforced, would be a legal requirement that cash registers have temper evident seals and run a OS with verified security (EAL 4+), and signed software. Unfortunately, even a mention of that would get heavy lobbying against, accusations of communist sympathies, etc.

Re:Windows is not the issue (1, Redundant)

Pig Hogger (10379) | about 6 years ago | (#24836505)

The real solution to this problem, the only solution that could ever be enforced, would be a legal requirement that cash registers have temper evident seals and run a OS with verified security (EAL 4+), and signed software. Unfortunately, even a mention of that would get heavy lobbying against, accusations of communist sympathies, etc.

Don't laugh, it's already been done [lavalnews.ca] .

An idea for business owners (2, Insightful)

nickswitzer (1352967) | about 6 years ago | (#24836197)

Why are they running the cash register software in an Administrator login? If they were able to run the software as a limited login, this would prevent most employees from being able to steal from the owners by not being able to run any program if properly configured. We all know if the employee had enough knowledge and alone time with the machine, passwords can be reset, and the zapper program installed/run, but this should subdue most employees with limited IT knowledge.

Re:An idea for business owners (4, Insightful)

McGiraf (196030) | about 6 years ago | (#24836231)

Read the summary again. The OWNER install the zapper to hide revenues to save on taxes.

Re:An idea for business owners (2, Insightful)

cduffy (652) | about 6 years ago | (#24836311)

Read the summary again. The OWNER install the zapper to hide revenues to save on taxes.

Yes, but the point the parent was making is that an unscrupulous EMPLOYEE could install a zapper to steal from the owner; it works both ways.

Likely the software needs admin to run / build for (1)

Joe The Dragon (967727) | about 6 years ago | (#24836523)

Likely the software needs admin to run / build for windows 9x.

If Unlce Sam (0)

Anonymous Coward | about 6 years ago | (#24836219)

Would keep stealing money from people this kind of shit wouldn't be as prevalent. I for one, am sick of giving 28% of my cash to the government assholes.

It's illegal, but is it immoral? (1, Interesting)

Anik315 (585913) | about 6 years ago | (#24836237)

The article makes it sound as if it's mostly super rich businesses that are doing this when it's probably mostly people just struggling to make it. Business aren't cheating the government out of anything. Really the only thing businesses owe goverment for is the use of their currency because as the current state of affairs stand citizens don't exactly get to decide what they want to pay for in government, and politicians think they can get a away with spending hundreds of billions of dollars for things most people simply don't want. I wouldn't really say that the government has the moral high ground here.

Re:It's illegal, but is it immoral? (3, Insightful)

tepples (727027) | about 6 years ago | (#24836427)

Really the only thing businesses owe goverment for is the use of their currency

And the roads to get suppliers and customers in and out of the place of business. And police to investigate shoplifting, burglary, vandalism, and other crimes that might happen.

Re:It's illegal, but is it immoral? (0)

Anonymous Coward | about 6 years ago | (#24836541)

Yeah, the roads and police really cost the billions upon billions being stolen from the tax payers. Good god, come up with something a little more interesting than this tired argument!

Re:It's illegal, but is it immoral? (1)

Anik315 (585913) | about 6 years ago | (#24836655)

The point is that it's all involuntary. No one asks me what I want to pay for. Say I don't want to pay for cops or national defense, there's no way for me to do that.

Public goods (1)

tepples (727027) | about 6 years ago | (#24836729)

Say I don't want to pay for cops or national defense, there's no way for me to do that.

To preempt a lot of back-and-forth, I'll refer readers to the Wikipedia article about public goods [wikipedia.org] .

Re:It's illegal, but is it immoral? (1)

LurkerXXX (667952) | about 6 years ago | (#24837029)

Then vote to change politicians and try to get one that sees it your way. Or move to another country. I think you'll find they tax things there based on how the government and other citizens prioritize things, and won't customize the tax platform to your specific wishes either. Welcome to the real world.

Re:It's illegal, but is it immoral? (0)

Anonymous Coward | about 6 years ago | (#24836677)

Roads are covered with gasoline tax.

Re:It's illegal, but is it immoral? (2, Insightful)

fabs64 (657132) | about 6 years ago | (#24836555)

Evading taxes is stealing money from society, from everyone, the poorest hobo to the richest magnate.

Yes it's immoral, it's also destructive, and that's why it can sometimes warrant imprisonment.

Re:It's illegal, but is it immoral? (0, Troll)

jcr (53032) | about 6 years ago | (#24836647)

Evading taxes is stealing money from society

What utter crap. If I don't tell a mugger about the money in my sock, am I stealing money from the mugger?

What's really sad is how many people believe that the people are the property of the government.

-jcr

Re:It's illegal, but is it immoral? (2, Insightful)

fabs64 (657132) | about 6 years ago | (#24836679)

The people aren't, the money is.

Trying to equate taxes with being mugged is pure idiocy.

Re:It's illegal, but is it immoral? (1, Troll)

jcr (53032) | about 6 years ago | (#24836999)

Trying to equate taxes with being mugged is pure idiocy.

They're both theft. The difference is that you can defend yourself against the mugger.

-jcr

Re:It's illegal, but is it immoral? (1)

rubycodez (864176) | about 6 years ago | (#24836835)

Since our government mainly exists to line the pockets of oligarchs and cartels, and to project their power, and greases the skids to do so with the blood of our soldiers, and steals from the working class by inflating the currency to bail out the mistakes of the richest, I'd say your morals are very much in need of rectification.

Re:It's illegal, but is it immoral? (2, Insightful)

fabs64 (657132) | about 6 years ago | (#24836889)

Your government fella, not mine, people get the government they deserve.

If you don't like it, do something about it, evading taxes is not a valid form of protest unless you are doing so openly.

Re:It's illegal, but is it immoral? (1, Insightful)

Anonymous Coward | about 6 years ago | (#24836737)

Really the only thing businesses owe goverment for is the use of their currency

Oh, really? Exactly how does a business operate without:
- Use of public roads (shipping, etc.)
- Use of public utilities
- Use of land (including right-of-ways)
- Use of government services
- Use of the general public as labor
- Use of the general public as customers

And we're not even touching things like political incentives, enjoying the benefits of having a large military to keep other countries from simply taking their revenue. The government secures trade deals that allow businesses to stay competitive, and negotiates treaties so that local business trademarks and technology are stolen elsewhere.

To sum it up, quite frankly businesses owe EVERYTHING to government. Citizens can exist even without a government, corporations can not.

Just for the record, I really could NOT care LESS about small places cheating the tax-man. Really, there just isn't any give-a-shit in me when a Mom & Pop store squeezes an extra couple of bucks out of Uncle Sam. What DOES bother me, is when I see multi-billion dollar companies (like our local public electric company) have 7 YEARS of completely UNPAID back taxes. Or airlines getting bailed out from bankruptcy, etc.

The dirty little secret (3, Insightful)

timholman (71886) | about 6 years ago | (#24836365)

Ah, yes, the dirty little secret of small business in America - everybody skims. Everybody. As my dad used to tell me, "If I didn't take cash off the top, I couldn't afford to stay in business. Nobody could. The taxes are too high." It wasn't a matter of wanting to cheat the tax man. It was a matter of survival for him.

I always make a point of paying in cash at local family-owned businesses whenever I can. Times are tough for those folks, and I can assure you that they appreciate a cash transaction.

Re:The dirty little secret (5, Insightful)

Gavagai80 (1275204) | about 6 years ago | (#24836633)

People say "everybody does it" to try to relieve their guilt at stealing from the honest people. I don't cheat on my taxes, and I have to pay more because of the people who do.

Re:The dirty little secret (3, Insightful)

couchslug (175151) | about 6 years ago | (#24836743)

"I don't cheat on my taxes, and I have to pay more because of the people who do."

That assumes tax rates have a direct relationship to anything other than what those imposing the taxes decide upon.

MOD PARENT DOWN (0)

Anonymous Coward | about 6 years ago | (#24836755)

So what you're saying is that small business owners need to skim to survive. The article summary coyly suggests that the only systems insecure enough to allow this are Windows systems (the article would never make it to slashdot without such a reference).

Therefore, what you're saying is that small business owners need Windows to survive.

MOD PARENT DOWN!!

Re:The dirty little secret (2, Insightful)

Anonymous Coward | about 6 years ago | (#24836787)

Ah, yes, the dirty little secret of small business in America - everybody skims. Everybody. As my dad used to tell me, "If I didn't take cash off the top, I couldn't afford to stay in business. Nobody could. The taxes are too high." It wasn't a matter of wanting to cheat the tax man. It was a matter of survival for him.

I always make a point of paying in cash at local family-owned businesses whenever I can. Times are tough for those folks, and I can assure you that they appreciate a cash transaction.

I never had any problem staying in business without cheating.

My dad taught me honesty, maybe that's why.

Re:The dirty little secret (0)

Anonymous Coward | about 6 years ago | (#24836799)

Oh boo hoo.

I wish I could get part of my salary in cash.

Re:The dirty little secret (0)

Anonymous Coward | about 6 years ago | (#24837001)

You must not lose faith in humanity. Humanity is an ocean; if a few drops of the ocean are dirty, the ocean does not become dirty. -Mahatma Gandhi

Remote systems (2, Interesting)

daeg (828071) | about 6 years ago | (#24836371)

We use remote systems in our franchise stores (Django-based). Things run in Firefox. Even the touch screen PCs run Firefox full screen mode (and soon to be tablets). Makes deploying new versions a breeze.

My Favorite Way of Stealimg From Myself (5, Interesting)

Anonymous Coward | about 6 years ago | (#24836381)

Many vendors would issue rebate checks in teh business name if you purchased certain quantities of food and supplies. These rebates never appeared on the invoices.

I would substitute the checks for cash in the daily deposit. Everything balanced and essentially undetectable.

I also would void large guest checks as if I was giving a refund and "refund" the cash to my pocket..

I would "comp" meals to complete strangers and pocket the money.

And I always ate well and never reimbursed my business for it.

If I sold inventory to another restaurant, the money went into my pocket.

So nothing to see here. Move along. Plenty of ways to steal without some damn "zapper". The secret is to never be greedy; greedy people get caught.

To cut fraud, cut taxes. (4, Insightful)

bcrowell (177657) | about 6 years ago | (#24836385)

This seems thoroughly unsurprising. The higher the tax rate, the higher the incentive to cheat. Quebec has a sales tax rate of 12.875% [wikipedia.org] , which is pretty high by south-of-the-border standards. The top marginal income tax rate in the U.S. from WWII until 1964 was 91%. Does anyone believe that rich people really paid 91% of their income to Uncle Sam? Of course not. They just hired people to find ways to avoid the tax. Action and reaction. Actually, Canada at least has made some efforts to harmonize their tax rates. If states in the U.S. wanted to increase the rate of collection of sales taxes, they would figure out ways of harmonizing their laws, and then it might be more practical to get rid of use tax, which is a joke, and charge the normal sales tax on interstate transactions. As it is, it's crazy. Every state may have dozens of different sales tax rates, and the list of taxable and nontaxable items is different in every state. For a small internet business with customers in all 50 states, it would be a prohibitive amount of work to pay taxes to all the states; you'd have to fill out 50 different annual tax forms, and calculate taxes on according to literally hundreds of local laws and rates. If they did that, they'd level the playing field, which currently treats bricks-and-mortar stores unfairly, and they'd also be able to lower their sales tax rates while still maintaining the same revenue.

Re:To cut fraud, cut taxes. (1)

ckaminski (82854) | about 6 years ago | (#24836471)

www.adptaxware.com

Takes care of those pesky forms for you. And may soon become mandatory on the Internet if the SSTI pilot States make it work.

doh! :(

Re:To cut fraud, cut taxes. (0)

Anonymous Coward | about 6 years ago | (#24836569)

> The top marginal income tax rate in the U.S. from WWII until 1964 was 91%.

I'll take your word for it. That is a whole lot better than now, btw.
There is no current upper bound on US marginal income tax rate.

This is because regular income tax and the alternate minimum income tax are
computed on two different bases. When they are substantially different,
the tax you have to pay can exceed your taxable income (under the regular
tax system) by as much as you care to imagine.

A large number of holders of employee stock options got hit by that when
the dot-com bubble deflated. If you exercise options in one tax year and
sell at a loss in a later year, you are a prime candidate for this.

Re:To cut fraud, cut taxes. (1)

Gavagai80 (1275204) | about 6 years ago | (#24836661)

Erm, you don't need to pay taxes to all the states -- only to yours. Use tax is at your own state's rate. The only tax laws you need to know are those for your location, since that's where an internet sale is considered to be taking place.

Re:To cut fraud, cut taxes. (3, Informative)

bcrowell (177657) | about 6 years ago | (#24836857)

Erm, you don't need to pay taxes to all the states -- only to yours.

Currently the retailer does need to pay sales taxes to any state where they have a physical presence, or "nexus." [nysscpa.org]

Use tax is at your own state's rate.

Use tax is paid at the rate of the purchaser's home state. [wikipedia.org]

The only tax laws you need to know are those for your location, since that's where an internet sale is considered to be taking place.

If you have a "nexus" in the customer's state, you pay the rate in the customer's state [nysscpa.org] .

Re:To cut fraud, cut taxes. (1)

jrumney (197329) | about 6 years ago | (#24836881)

The top marginal income tax rate in the U.S. from WWII until 1964 was 91%. Does anyone believe that rich people really paid 91% of their income to Uncle Sam?

Not anyone who understands what a marginal tax rate is.

Re:To cut fraud, cut taxes. (1)

Billly Gates (198444) | about 6 years ago | (#24836951)

Most rich people had their taxes slashed down to the 34% we have today and they still cheat more than ever.

I do not disagree with you that taxes are quite high and could be lowered more. But for a business its job is to make money and make shareholders happy at all costs. Ethics are gone through the window and I hope this is just a recent phase by business to treat all their employers as numbers and only focus on the short term numbers.

There is talk of abandoning all internet sales taxes so business doing internet sales transactions do not have to do 50 different tax codes to compute the taxes owed. I wonder how many just buy servers in India to avoid this problem?

Re:To cut fraud, cut taxes. (1)

yoha (249396) | about 6 years ago | (#24836961)

bricks-and-mortar stores with operations in all 50 states already pay taxes according to state and local custom. from what i can tell, its not a prohibitive amount of work.

Similarly, online operators with multi-state footprints (think warehouse and server operators) already adhere to state and local custom in terms of payroll taxes.

I, like you, favor simplicity, but it also helps to be informed before making an argument.

I've had requests to do this (4, Informative)

Rupert (28001) | about 6 years ago | (#24836401)

I've been asked by two retailers to reduce the amount reported by the point of sale software I was writing. One of them tried to tell me that because he owned the business it wasn't illegal. I told him that I'd just finished writing an enforcement system for Customs and Excise and would he like me to have them contact him to explain the situation?

Re:I've had requests to do this (2, Insightful)

russotto (537200) | about 6 years ago | (#24836479)

I told him that I'd just finished writing an enforcement system for Customs and Excise and would he like me to have them contact him to explain the situation?

Darned right. I don't much care if retailers evade some sales taxes. But they can do their own cheating; if they want me to do it they better have some way of serving my time for me if and when they get caught.

Re:I've had requests to do this (2, Interesting)

dubner (48575) | about 6 years ago | (#24836673)

... I don't much care if retailers evade some sales taxes.

Well I do care. I pay the retailer the sales tax and he pockets it. He's not only cheating the government; he's scamming me.

I always have my suspicions about a dealer at a flea market, convention, etc. who charges sales tax when none of the others do (because they know they can get away with it for a temporary occasion). I usually assume that dealer is greedier than the others.

Of course, I often think the worst (and am often proved right).

Re:I've had requests to do this (1)

Artifakt (700173) | about 6 years ago | (#24836701)

I really doubt that most of these people are reacting to 'excessive' government taxation, because most of them I've met are too dumb to either organize a Robin Hood style movement or to even join or covertly support one. I sometimes prepare taxes commercially, and I've had several people I didn't know from Adam, act honestly amazed that I wouldn't help them flat out lie, and risk 10 years plus in jail, to "do them a little favor". I half expected one of them to ask me to just rob a bank for him and give him all the money, the way he was going. I've had one such customer announce loud enough that 15 other people in the waiting room could hear it, that he wanted me to help him claim 30 American Indian employees he didn't actually have working for his mom and pop grocery business, and offer to present me with a list of names like 'Running Deer' and 'Singing Bear' if I could just give him a few minutes, all so he could get a credit that his scheme wouldn't have actually qualified him for. I am legally required to respect the confidentiality of my customers, even if I end up turning away their business, but there is no law that says those other 15 people can't tell everything they know to the IRS and shoot for that 10% reward they would get on successful prosecution.
        These people, by and large, are not tax rebels, instead they would try to cheat their way out of anything remotely possible, and usually have no idea what the limits are.

Some insights why Québec is the "leader"... (4, Informative)

Pig Hogger (10379) | about 6 years ago | (#24836405)

Until about 20 years ago, Québec had no sales tax on restaurant meals under a given amount (something on the order of $3.50 -- often, waitresses made two invoices below the cuttoff amount so the client would not be charged taxes). So, light lunches eaten by little worker bees would not be taxed but heavy business lunches eaten by fat executives would be.

Eventually, some very senior bureaucrat very high up in the revenue department became pissed that his premium restaurant food would be taxed and not the lowlives below him in the civil service food chain, so he rescinded the tax exemption for cheaper proletarian meals, which actually failed to bring significant additional revenue, given the extra administrative costs.

This put a bigger burden on smaller restaurants, effectively throwing some out of business, and the non-touristic restauration industry has yet to recover from that downset. So the zapper software came into existence.

Those programs would simply slog through the transactions of the day, discarding most who were paid cash, and had no alcohol (because alcohol sales also have to be tallied precisely).

This is news in the US? Really? (5, Interesting)

Anonymous Coward | about 6 years ago | (#24836441)

In my old country - Brazil - the cash register vendor had, as part of their pitch, the section about how at the end of the day you would flip a switch in the machine and it would invent a whole new day of sales for you up to a specified amount.

I worked on a restaurant that, when closing, would have the manager moving the register to some back room and generating a new day of sales.

This came from the manufacturer. It was not an add-on. And it was easy to do, the manager only had to flip the switch, punch in the amount for the day, and let it rip.

This manufacturer was one big american company that was purchased by a bigger company and then spun off with the same name.

The registers, BTW, were pre-audited by the government team - which clearly wasn't savvy enough to find the switch or had been properly compensated for their blindness.

I'm surprised that anyone is surprised... Though I agree that it is wrong.

Re:This is news in the US? Really? (2, Insightful)

maxume (22995) | about 6 years ago | (#24836813)

Part of the reason that the U.S. economy has worked as well as it has, for as long as it has, is the relatively low level of corruption.

Trust breeds trust, and so on.

Did anyone else... (1)

Darkness404 (1287218) | about 6 years ago | (#24836515)

Did anyone else look at this title and wondering why restaurant owners were doing something with the NES Zapper lightgun?

Re:Did anyone else... (1)

Tony Hoyle (11698) | about 6 years ago | (#24836789)

I figured they were doing something with IR remote controls, which are universally called 'zapppers' in this country.

Why even go that far? (1)

NerveGas (168686) | about 6 years ago | (#24836663)

When I worked in a restaurant, several of the employees had ways to make it look like they had wrung up a transaction, but never actually entered it.

Cash in their pockets, and no record of the event. No need for software at all!

Re:Why even go that far? (1)

maxume (22995) | about 6 years ago | (#24836831)

Owners probably prefer a system where they are the ones to pocket the cash.

Anybody got a link for the download? (1)

vistahator (1330955) | about 6 years ago | (#24836773)

I searched the pirate bay for it but couldn't find it.

Don't get it (1)

Frankie70 (803801) | about 6 years ago | (#24836777)

Can't restaurant owners buy cash registers which don't make automated records?

Or is there a law covering this in the US of 'Thereisalawforeverything' A?

They need to get rid of the tipped mini wage loop (1)

Joe The Dragon (967727) | about 6 years ago | (#24836839)

They need to get rid of the tipped mini wage loop hole as well.

any ways some places still use DOS based software or even dumb terminals so force people to use singed software will be bad for small restaurants.

Soon ... (1)

PPH (736903) | about 6 years ago | (#24836883)

... coming to voting machines near you.

Re:Soon ... (1)

CityZen (464761) | about 6 years ago | (#24837031)

Soon? Like 8 years ago soon, if not more?

LIttle surprise here (1)

pablodiazgutierrez (756813) | about 6 years ago | (#24836949)

In Spain, and I have no reasons to believe this doesn't apply overseas, pretty much every custom software development includes separate "cash boxes", unoriginally nicknamed "box A" and "box B". Anyone who's ever written software for a small business knows this and should be prepared to provide the service. Otherwise, your vanilla shelf MS Windows package would do the job just as well, at a much lower price.

Purchases (5, Interesting)

Paradise Pete (33184) | about 6 years ago | (#24836993)

When I owned a bar/restaurant in California, one of these would have done no good at all. When the tax guys show up they don't even want to look at your register tapes. They look at your purchases. They see how many bottles you've bought, they know how many drinks you can pour, and they just multiply.

And since purchases must go through only the very small handful of licensed distributors, there's no hiding it.

And as for the people who are saying "If you don't skim you can't stay in business," well, maybe you're right. I went broke.

Tamper-Proof Cash Registers (2, Interesting)

Detritus (11846) | about 6 years ago | (#24837005)

Years ago, I read a story about a European country, I think it was Italy, mandating the use of state-approved, tamper-proof cash registers in all retail stores. This was due to massive tax fraud at the retail level. Does anyone know if it was successful?
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