As a self-employed businessman, your company purchases are tax exempt. This used to mean that you didn't have to pay that nasty old 6% state sales tax.
Now it means you don't have to pay that 36% "sales" tax. You can save 36% on that second "business" computer, and additional "business" couch, etc. by just presenting your certificate.
Don't worry about the retailer checking real close. He makes the same amount of profit whether that certificate is real or not and, quite frankly, would rather not know.
And, since the massive IRS is gone, who's going to check every little retailer?
I expect the number of small businesses to increase tenfold.
One of the penalties for fraudulent use of a tax exempt certificate is permanent loss of the certificate even for legitimate business purchases.
Will some people risk it? Sure. Enough to worry about it? No.
There is massive fraud and abuse now. There will always be cheaters. It will be tougher to cheat with the FairTax. The retailer will not be the one to check on the tax exempt claim. Those subject to audits will be reduced from 140 million to about 15 or 20 million. Cheaters will get scrutiny. Don't worry about.