Ethics and Business
I don't normally write a lot about work things, but this is an exception. I had a client recently that I actually ended up refusing to do a tax return for and it was once again, an eye opener. It was a married couple and they'd been clients of my employer last year, but with a different tax pro in a different office. That person wasn't available so they wound up at my desk.
Both are self-employed. One of the two had all the receipts and other data to properly prepare a tax return The other had only income information but no receipts or any other 'back-up" to substantiate the expenses. Then again initially, they claimed no expenses. Well, they wanted to claim a cell phone expense but when the other person reminded them that the person they work for pays that bill, that expense went bye-bye.
When we were finished, their balance due to the IRS was several thousand dollars more than they were expecting. One of them was of the mind "we'll get a payment plan and pay it off. We can't avoid it so let's just deal with it." But their spouse said "no way. I had this expense and that expense and I don't want to pay so they can just give my money away to lazy people." So that person started saying they had spent this amount and that amount; and their spouse kept contradicting them.
Finally I said I could not prepare their tax return due to ethical concerns. It's a joint return and if they can't agree on the income and expenses for one of their sole-proprietorships, I can't sign the return saying I know the information is correct to the best of my knowledge. The one who wanted to just start listing expenses was angered and stormed out. The other apologized and said they totally understood my decision.
After they were gone, one of the other tax-pros in the office asked me "couldn't you just make a note in the file and do what that one person wanted to do and that way you'd be protected?" I replied that wouldn't work. Just because I made a note that I knew the information was probably inaccurate doesn't relieve me of my obligations under the law.
What would you have done? Just to factor in how my choice impacted me, I wasted over an hour of my time and by not doing the return I lost roughly $65. Not that this should matter. Even if I was losing $6,500 or $650,000, I wouldn't do it any differently. I won't prepare a tax return I know is fradulent, or where I have more than a reasonable suspicion that fraud is being committed.
Being ethical may be hard on the wallet at times, but it's certainly easy on the heart and on the soul.
Both are self-employed. One of the two had all the receipts and other data to properly prepare a tax return The other had only income information but no receipts or any other 'back-up" to substantiate the expenses. Then again initially, they claimed no expenses. Well, they wanted to claim a cell phone expense but when the other person reminded them that the person they work for pays that bill, that expense went bye-bye.
When we were finished, their balance due to the IRS was several thousand dollars more than they were expecting. One of them was of the mind "we'll get a payment plan and pay it off. We can't avoid it so let's just deal with it." But their spouse said "no way. I had this expense and that expense and I don't want to pay so they can just give my money away to lazy people." So that person started saying they had spent this amount and that amount; and their spouse kept contradicting them.
Finally I said I could not prepare their tax return due to ethical concerns. It's a joint return and if they can't agree on the income and expenses for one of their sole-proprietorships, I can't sign the return saying I know the information is correct to the best of my knowledge. The one who wanted to just start listing expenses was angered and stormed out. The other apologized and said they totally understood my decision.
After they were gone, one of the other tax-pros in the office asked me "couldn't you just make a note in the file and do what that one person wanted to do and that way you'd be protected?" I replied that wouldn't work. Just because I made a note that I knew the information was probably inaccurate doesn't relieve me of my obligations under the law.
What would you have done? Just to factor in how my choice impacted me, I wasted over an hour of my time and by not doing the return I lost roughly $65. Not that this should matter. Even if I was losing $6,500 or $650,000, I wouldn't do it any differently. I won't prepare a tax return I know is fradulent, or where I have more than a reasonable suspicion that fraud is being committed.
Being ethical may be hard on the wallet at times, but it's certainly easy on the heart and on the soul.
posted by me at 4:43 PM
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