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Isn't that accomplished under the nrst (even if you choose to call it something else?)

Third party reporting is accomplished when both parties of a transaction are required to report. The employer reports wages withheld to the IRS and to SS; the employee reports his wages to the IRS along with documentation that includes FICA taxes withheld.

The FairTax only requires that a report be made by the tax collector.

Third party reporting is accomplished when both parties of a transaction are required to report.

Except when the employer is actually the small business and his employees/partners looking to make a buck off evading both income and payroll taxes.

The point, not all income is reported among the worst offenders as determined by the IRS, those small business operating on cash both in regards its employees (pretending to be independant contractors to similarly evade/avoid taxes) and in regards itself.

Self reporting under self-employment and small business, where the biggest evasion problems lay, is non existent as regards the illegal trade and the cash underground.

There is no third party reporting anything where evasion of income and payroll taxes are concerned and where the big gains are to be had by those intent on evasion by simple failure to report at all.

The FairTax only requires that a report be made by the tax collector.

Yep at both ends of the business' operations, himself and his suppliers from whom he purchases taxfree.

That makes for a third independant party reporting that assures a clear track of monitoring of business required to collect the FairTax.

Those that pay taxes on products they buy are purchasing retail and are not required to collect taxes if they should resell there stuff. Products may only be taxed once under the retail sales tax system implemented under the FairTax legislation.

H.R.25

Fair Tax Act of 2005 (Introduced in House)
http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.25:

`SEC. 1. PRINCIPLES OF INTERPRETATION.

`(a) In General- Any court, the Secretary, and any sales tax administering authority shall consider the purposes of this subtitle (as set forth in subsection (b)) as the primary aid in statutory construction.

`(b) Purposes- The purposes of this subtitle are as follows:

`(1) To raise revenue needed by the Federal Government in a manner consistent with the other purposes of this subtitle.
`(2) To tax all consumption of goods and services in the United States once, without exception, but only once.
`(3) To prevent double, multiple, or cascading taxation.
`(4) To simplify the tax law and reduce the administration costs of, and the costs of compliance with, the tax law.
`(5) To provide for the administration of the tax law in a manner that respects privacy, due process, individual rights when interacting with the government, the presumption of innocence in criminal proceedings, and the presumption of lawful behavior in civil proceedings.
`(6) To increase the role of State governments in Federal tax administration because of State government expertise in sales tax administration.
`(7) To enhance generally cooperation and coordination among State tax administrators; and to enhance cooperation and coordination among Federal and State tax administrators, consistent with the principle of intergovernmental tax immunity.

`(c) Secondary Aids to Statutory Construction- As a secondary aid in statutory construction, any court, the Secretary, and any sales tax administering authority shall consider--

`(1) the common law canons of statutory construction;
`(2) the meaning and construction of concepts and terms used in the Internal Revenue Code of 1986 as in effect before the effective date of this subtitle; and
`(3) construe any ambiguities in this Act in favor of reserving powers to the States respectively, or to the people.

As pointed out earlier, a certified business is tracked not only through its own reporting of its sales, but also by reporting of its suppliers from whom he purchases tax exempt. This assures the capacity for close monitoring and audits by state tax administrators where discrepencies flag the need.

Where retail taxes have been paid by a reseller, (e.g. one who has no certification and not required to collect a the tax) there is no issue in the first place. The FairTax system is a tax once but only once system thus avoiding many of the pit falls of systems relying on taxing resale products for tax revenues.

There are other sets of documents in the FairTax scheme of things that can be used for third party reporting on the tax collectors as ancient_geezer has mentioned several times.

In addition, the issue here is not about taxpayer compliance since that's done when the taxpayer purchases the taxable thing and gets the receipt. What you're really discussing is theft of government tax money by merchants who have agreed in writing to collect and forward the funds - and are paid to do so. the state sales tax authorities certainly have sufficient third party sources to rely upon ... and they do so now.