Articles

Get a Receipt!

In Accounting & Finances, Business, Taxes on September 9, 2014 by Sufen Wang

Help the BOE Fight Sales Suppression
 
internet-32340_640From hackers to spammers to identity thieves, the digital frontier has its fair share of outlaws. Luckily most folks are becoming aware of such vulnerabilities in the electronic arena, and taking precautions to level the playing field. However, there’s one type of hybrid digital and brick and mortar crook who most taxpayers don’t even know exists – and so don’t even realize how they’re getting the short end of the stick.
 
cashier_6These wizards, a.k.a. local business owners, use “zappers” (sales suppression software) to make sales transactions magically disappear and change in their electronic Point of Sale (POS) recordkeeping systems. They then under-report their taxable sales by making it look like they sold less than they actually did, and Presto!, they pay less taxes than they should. Due to these businesses waving their crooked wands, California gets cheated out of tax dollars used to make life run smoothly for all its residents. And this whole trick happens while other taxpayers pay their fair share of sales tax.  So, they are not only cheating the State, but also rubbing you by keeping your tax money paid to them.
 
bookreaderIt’s obviously illegal to cook the books, and it’s harder to catch when it’s done electronically. However, the California State Board of Equalization (BOE) – the only publicly elected tax commission in the United States – are the go-to folks for identifying these tax criminals. The process is simple: undercover BOE auditors visit suspected businesses and buy merchandise. If they detect the use of zappers, the reported sales amounts is disregarded, and the BOE goes into full-blown audit mode, calculating sales based on things like cash to credit card payment ratios, purchase information obtained from suppliers, daily sales averages, etc.
 
narrow-gasoline-receiptHowever, BOE auditors can’t be everywhere at once – which means that everyday consumers will have to join the fight. It’s as simple as asking for a receipt when purchasing merchandise. Going paperless is great for the environment, but it also makes it easier for businesses to wipe that bag of chips you just bought right off the sales transaction map. Asking for a receipt, especially when you pay with cash, discourages dishonest businesses from fudging their electronic records and helps the BOE identify those businesses. After all, you’ve got the hard evidence in-hand – even if the snack you bought is already in your belly. 
 
tax evasionhandcuffsAnyone caught using illegal sales suppression software could go to jail, be fined, and have to pay all illegally withheld taxes owed, including penalties and interest. If you suspect sales evasion, save your receipt and contact the BOE’s Tax Evasion Hotline at 1-888-334-3300. Everybody has to play by the same set of rules, so help the BOE give these tax crooks what they deserve!
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Sufen Wang, M.S.Accountancy
Wang Solutions, Long Beach, CA (562) 856-0793
Editor: Hannah Huff, M.F.A. Creative Writing: Poetry, (626) 806-5805

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