Dear Quentin,
I enactment remotely for a person doing bookkeeping enactment for his corporation. He writes disconnected expenses successful a “gray” country that I tin overlook, and judge would walk an audit test. However, determination are different expenses that I cognize are not legitimate.
My person has a precocious nett worthy — good implicit $10 cardinal — and could easy spend these idiosyncratic expenses. Besides my conscience bothering me, however would the Internal Revenue Service and instrumentality enforcement presumption my participation?
I americium told what the expenses are — and I grounds them successful our accounting software.
Friend successful a Quandary
You tin email The Moneyist with immoderate fiscal and ethical questions related to coronavirus astatine qfottrell@marketwatch.com, and travel Quentin Fottrell on Twitter.
Dear Friend,
“I did what I was told” does not clasp overmuch sway for professionals who cognize the quality betwixt illegitimate and morganatic expenses. You person blurred the boundaries betwixt leader and friend, bookkeeping and taxation dodging, and idiosyncratic work and nonrecreational obligation.
The IRS volition clasp your friend/employer liable for fines and repayment of backmost taxes should an audit uncover superior errors oregon taxation evasion, but helium could constituent the digit astatine you for incompetence or, worse, knowingly making mendacious claims. If you signed disconnected connected these accounts, you could besides beryllium liable and look hefty ineligible fees.
Unless you could assertion a “due diligence” oregon “good faith” defence — you had grounds to judge that the claims made were close and implicit astatine the clip you balanced the books, and/or you were relying connected accusation fixed to you — you could find yourself successful blistery h2o on with your employer/friend.
You hazard damaging your reputation, successful summation to immoderate ineligible repercussions. You are required to comply with Generally Accepted Accounting Principles (GAAP) and/or Generally Accepted Auditing Standards (GAAS). I’ll adhd 1 much to that: Generally Accepted Personal Standards.
Do not let others, careless of their relation successful your life, to pb you into fishy decisions and hazard your bully name. Today, it could beryllium dodgy bookkeeping, and time it could beryllium a person asking for wealth oregon a spouse asking you to co-sign connected a false owe application. You lone person 1 signature. Use it wisely.
“When bookkeepers and accountants are interacting with the IRS, it is important for them to supply close and honorable information,” Acting Assistant Special Agent successful Charge Lisa Mendelsohn of IRS Criminal Investigation said successful a recent lawsuit where an accountant was charged with providing mendacious accusation to the IRS.
“Those who supply mendacious accusation volition beryllium held accountable,” she said.
By emailing your questions, you hold to having them published anonymously connected MarketWatch. By submitting your communicative to Dow Jones & Company, the steadfast of MarketWatch, you recognize and hold that we whitethorn usage your story, oregon versions of it, successful each media and platforms, including via 3rd parties.
Check out the Moneyist backstage Facebook group, wherever we look for answers to life’s thorniest wealth issues. Readers constitute successful to maine with each sorts of dilemmas. Post your questions, archer maine what you privation to cognize much about, oregon measurement successful connected the latest Moneyist columns.
The Moneyist regrets helium cannot reply to questions individually.
More from Quentin Fottrell:
English (US) ·