Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...
A Seattle-area restaurant owner accused of using software to hide receipts and steal sales tax revenue pleaded guilty Aug. 30 in the first such prosecution in the U.S., the Washington Attorney General’s office said.
Yu-Ling Wong, owner of Facing East Restaurant in Bellevue, Wash., will pay $300,000 in restitution to the state Department of Revenue under terms of a plea agreement that includes a count of unlawful use of sales suppression software as well as counts of theft and filing false or fraudulent tax returns ( Washington v. Yu-Ling Wong , Wash. Super. Ct., No. 16-1-00179-0, plea entered 8/30/17 ).
The burgeoning use of “zapper” software “is not only a national problem, it’s a worldwide problem,” said Mike Chertude, computer assisted audit program manager for the revenue department.
“In the U.S., we are finding more and more cases around the country,” Chertude told Bloomberg BNA Aug. 31.
At least 24 states have enacted anti-zapper legislation, according to a National Conference of State Legislatures briefing paper. A prosecutor who worked on the case said it was the first in which a defendant was charged with criminal use of sales suppression software.
“My office is always on the lookout for new technologies scammers are using to hurt consumers,” Attorney General Bob Ferguson told Bloomberg BNA in an Aug. 31 email. “Sales suppression software helps dishonest businesses steal from Washington taxpayers. My office is committed to stopping tax cheats who siphon funding from our schools, parks and emergency services.”
Wong’s attorney, Robert Chicoine of the Chicoine Law Group in Seattle, said his client avoided prison time because of her significant cooperation, including entering into a unique, real-time monitoring agreement of her restaurant’s books.
“Zappers are being used in many restaurants and other businesses throughout the country, and I think it’s a significant problem,” Chicoine said. “Often kitchen staff who come from different cultures want to be paid in cash. And this is a problem for small restaurants.”
Chicoine and co-counsel Richard Ainsworth, a champion of state anti-zapper laws and a law professor at Boston University, worked to locate software experts who could institute the monitoring, which Chicoine believes will eventually be adopted in such cases around the country.
“It offers a real-time means for a government to record as it happens the receipts of any business and can be remotely viewed without going through audits,” Chicoine said.
To contact the reporter on this story: Paul Shukovsky in Seattle at PShukovsky@bna.com
To contact the editor responsible for this story: Jennifer McLoughlin at email@example.com
Text of the plea agreement is at http://src.bna.com/r98.
Copyright © 2017 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)