Doing the Right Thing…When Tax Ethics Get Murky

An AICPA Insights article called “Doing the Right Thing…When Tax Ethics Get Murky” was recently posted by Edward S. Karl, CPA, Vice President of Taxation, American Institute of Certified Public Accountants (AICPA). The article states that he often gets phone calls from members who are troubled by a professional ethics issue. “Ed, I have a conflict with a client; I don’t trust him.” Or, “I just engaged with a new client and I suspect the old accountant of doing something wrong; should I turn her in?” The scenarios change but in the end, they always ask: “What should I do?” He always says: “I can’t tell you what to do!” It comes down to a matter of ethics. How do you tell someone how to behave?

According to the article, Mr. Karl states that: “Over the years, while teaching classes on subjects like the AICPA’s enforceable tax ethics, the Statements on Standards for Tax Services, or the Internal Revenue Services’ Circular 230, I often ask the participants to define ethics.  “Guided by a code of conduct,”  “acting with integrity,” “having a moral code,” “moral principles that govern a person’s behavior,” or “living your life with high values” are examples of what I’ve heard.” The definition that resonates best is “doing the right thing.”

He goes on to say: “that’s why I tell people I can’t tell them what to do; within the framework of the actual ethical guidance, “doing the right thing” for me may not be the right thing for someone else. Now, I don’t leave people hanging; I give them information about the rules, for example, the SSTSs and the Code of Conduct, ask them questions, suggest various alternatives, and try to help them formulate an answer that makes sense for them. It’s still not easy. What do you do when the ethical rules say one thing but your conscience says another?”