CPA Tax Accountant Ethical Responsibilities Chicago Illinois

There are entire books and courses that are taught on CPA / Enrolled Agent Ethics. But those courses can usually be summed up as follows. The CPA / Taxation Professional has the following responsibilities
1 – To protect our clients
2 – To produce financial statements and tax returns to the best of our abilities while performing proper due diligence
3 – To avidly and zealously represent our clients in the event or audits or other administrative reviews before an appropriate governmental agency
4 – To maintain our independence
5 – And to maintain the highest ethical standards
There are enormous amounts of pressure put on us to not maintain these standards. That pressure normally comes in three common varieties
1 – Clients that don’t want to pay taxes
2 – Clients that need lending
3 – Other financial considerations
Although they are a fact of life, no one likes paying taxes. Improperly filing your taxes can be one of the biggest mistakes that you can make. If your return get’s audited, the additional tax, interest, and penalty can become egregious. Depending on the agency, they may open up anywhere from three to seven years of returns. If it is found that you substantially under-reported your income, you could face a charge of Income Tax Evasion. Each count of Evasion is punishable with up to 12 months in a federal prison.
Lending has become a larger issue, given the current economy and difficulties in the lending communities. Clients might want to increase their income in order to “qualify” for a mortgage or additional credit facility. Doing so is very dangerous. Banks make most of their money through lending. If you don’t qualify for a loan, then you are probably going to have a problem paying it back. If you are going to have problems, then you face foreclosure and bankruptcy. Most of the time it’s better to be conservative, and not borrow the money in the first place.
Other financial considerations can include issues like our own income. When we tell a customer no, we run the risk of losing that customer which can adversely affect our own pocketbooks. Try going home and telling your children that they can’t continue to go to the school they know and love because you wouldn’t allow a client to cheat on their taxes. Try telling your spouse that they can’ t go on their dream vacation because you wouldn’t allow a customer to fraudulent;y obtain some financing. Maintaining our independence and high ethical standards is not easy.
But it is the only way that the system works. Without it we would put our clients and our licenses at risk. I’m not trying to say that there aren’t CPA’s and other Tax Professionals that are unethical. Sadly, there are. The accountant that asks what your income was. You say that you don’t know. They respond by saying, “Well what would you like it to be?” Next, they create a completely false income tax return and then have you sign a liability waiver protecting their license. This leaves you without protection and generally hangs you out to dry. It happens all the time.
Or the Public Accountant that uses your copy of Quickbooks to complete an income tax return for your business. You don’t know what is deductible in the first place, but they are going to use your work anyway. Again, they have you sign a liability waiver that does the same thing as the prior case. Have they done a proper due diligence as required by the taxation authorities? Absolutely not. Will you be the person held financial responsible for their improper acts? Yes.
Let’s cut to the chase. Cheaters never win. I’ve done this thing called accounting and taxation longer than I care to remember. Ultimately the clients that leave us because we maintain the high ethical standards generally don’t stay in business for very long. I’ve seen it time and time again over the past two and a half decades. They are generally less profitable than our other clients and sooner or later get caught. It’s just not worth it.
If you are having difficulties in this regard, please call our offices.
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