Richard Ainsworth

INTRODUCTION

Virtual intermediaries (enterprises like Priceline.com,[1] Expedia.com,[2] Orbitz.com,[3] and Travelocity.com[4]) are having a significant impact on state and local revenues. These enterprises (room remarketers) acquire lodging at steep discounts and then resell the accommodations to the public. When rooms are resold the discount the public receives is more ...

The Sales and Use Tax is an essential part of Pennsylvania’s revenue profile. Not only is it the State’s second largest revenue source,[1] it has historically played a critical role in reducing the volatility of Pennsylvania’s overall tax collections.[2] The sales tax is also critical to the city ...

Technology solves missing trader intra-community (MTIC) fraud.[1] This should come as no surprise. MTIC is technology-intensive fraud – its solution should also be technology-intensive.

In the early 2000″s when MTIC was all about cell phones and computer chips, newspaper reporters visited fraudsters and got lessons on how easy it was to ...

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)[1] was expected to raise between $2.3 and $1.05 billion annually,[2] and has already become the Commonwealth’s fourth largest revenue source.[3] Actual revenue ...

New York adopted an industry-specific value added tax (VAT) to solve problems with virtual intermediaries (room remarketers) under its hotel accommodations tax.[1] The New York VAT resembles the VAT used in the European Union (EU). It is a credit-invoice VAT[2] that subjectively values supplies.[3]

Michigan has also adopted an industry-specific ...

No other New England state is as vulnerable to Zappers as is the State of Massachusetts.[1] 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 ...

The EU VAT, like most mature tax regimes, is resistant to change. Fraudsters are testing this resilience today, and this may not be such a bad thing for policy-makers. Significant challenges produce significant reforms proposals.[1] If the US is seriously considering a VAT it would do well to observe this ...

Skimming cash receipts is an old fashioned tax fraud; a fraud traditionally associated with small or medium sized enterprises. Large businesses with formalized internal control mechanisms, external accountants, and professional management structures do not normally engaged in skimming.[1] Businesses that skim frequently keep two sets of books (one for the ...

“Zappers,[1]” or automated sales suppression devices, have brought unheard of efficiencies and economies of scale to a very simple tax fraud – skimming the cash sales that pass through point of sale (POS) systems, network connected electronic cash registers (ECRs). Until recently “the largest criminal tax case in the history ...

Red Ink Rising, the Peterson-Pew Commission on Budget Reform’s report,[1] presents the country with a fiscal/employment dilemma – Congress must act immediately to stem the federal debt, but it must move carefully lest it harm employment in the fragile economy. In short, we must act fast and slow – we ...

Recent developments in German VAT compliance, notably the imposition of criminal penalties for failing to immediately amend a preliminary return that is known to be in error, are leading businesses to third-party VAT solutions.[1] Germany is not alone in the creative use of criminal enforcement to collect the VAT,[2] but ...

On January 28, 2008 the Quebec Minister of Revenue, Jean-Marc Fournier, announced[1] that by late 2009 the MRQ will begin testing a device, the module d’enregistrement des ventes (MEV)[2] that is projected to substantially reduce tax fraud in the restaurant sector. By 2010 or 2011 MEVs will be mandatory in ...

Two caveats open this paper, one dealing with the scope of analysis, the other with the results we are expecting.

First, the scope of this inquiry needs to be broadened. Even though the topic asks that we limit ourselves to VAT/GST and direct taxes, in most jurisdictions there are three ...

There is a demand-market for technology that facilitates tax fraud. By all accounts the providers in this market are working in a growth industry.

In the short term this is bad news for those concerned with tax policy[1] and information privacy.[2] In the long term however, the ...

Auditor independence was a global concern of financial regulators in the 1990’s. Some observers saw this in a positive light, a natural development. Adjusting auditor independence rules was a manifestation of global convergence in corporate governance structures.[1] New rules, especially rules leaning toward a harmonized system were welcome. 

There was ...

On January 1, 2009 a minor change in the Czech Republic VAT[1] became effective. A use and enjoyment standard was added to modify the sourcing of certain service transactions.[2] Traditional proxy-based rules, derived from Articles 43 and 56(1) of the Recast VAT Directive (RVD),[3] are set aside by this modification ...

INTRODUCTION

Marketplace technology is (inadvertently) chipping away at the effectiveness of consumption taxes – the Japanese Consumption Tax (CT), the European value added tax (VAT), and the American sales tax (ST) are all affected. Frequently a technology-patch or a law change can repair the tax-damage, but sometimes even though a patch ...

Tradable services – VoIP termination services, mobile minutes, software as a service (SaaS), or almost any service bought or sold in the “cloud”[1] – are a distinct class of taxable supplies. These service-based supplies both resemble and differ fundamentally from goods. They also differ from services that are consumed-on-purchase (consumed ...

In March 2004 the European Commission solicited comments on a proposal to simplify value added tax (VAT) obligations through a one-stop scheme.[1] The proposal was modest in scope. It was designed to build upon the success of a similar scheme[2] that dealt with non-EU established persons supplying digital products to ...

Significant change is anticipated in the Japanese Consumption Tax. This is the conclusion of the Japanese Tax Commission in its mid-term report, presented to Prime Minister Junichiro Koizumi on June 17, 2003. When the Tax Commission’s Chairman, Professor Hiromitsu Ishi,[1]submitted A Sustainable Tax System for Japan’s Aging Society[2]the Commission indicated ...