State governments target tax-cheating software

GLENN ADAMS Associated Press Published:

AUGUSTA, Maine (AP) -- Cash-strapped state governments are searching every crevice for money, and some have found a new target: computer programs that enable businesses to keep two sets of books simply by plugging a flash drive into their cash registers.

The so-called tax-zapper software lets businesses, especially those that deal mostly in cash, underreport taxable sales and pocket money that should go to the government.

Five states -- Florida, Georgia, Maine, Utah and West Virginia -- have enacted laws cracking down on the programs. About a dozen others are considering similar proposals.

The software sells for around $500. It's always been illegal to cheat on taxes, but the new laws are the first to specifically target tax zappers.