Tax practitioners thus face difficult issues when it comes handling client on certain issues especially when the client chooses to go out of the book. The given scenario is that of a client that would like the tax practitioner to go out of the book and provide tax returns without the provision of documentation. As a tax professional that has never missed information, I will be cautious about releasing the tax return before the documentation has been provided. The fact that the client makes a claim that they have made significant contributions to charity makes the entire situation even more difficult. The best choice would be to hold on to the tax return until adequate documentation has been provided.
Tax practitioners are usually required to comply with a legislated professional code of conduct. Failure to comply with the code can result in sanctions. Tax practitioners are liable to penalties as a result of a specified misconduct. There is additionally no statutory liability, fine or interest charged by a tax practitioner’s client as a result of negligence by the tax practitioner (Braithwaite, 2017). This means that in case the documentation for charitable contributions was later found to be inadequate or inaccurate, then any penalties or sanctions will be issued towards me as the tax practitioner. I would thus comply with the required state regulations of having necessary documentation before issuing a tax return.
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I would ask the client to go back to his house and bring the documentation that he claims to have. I would explain that the consequences of releasing a tax return without having the required documentation are far greater than going through the trouble of getting the documentation required. It is beneficial to question why the client would ask for his tax return without providing adequate documentation. Even though it is important to be loyal to one’s clients, it is of greater importance to demonstrate a high level of professionalism in one’s work in order to build trust.
Apart from being cautious, there are several IRS requirements one should consider when making tax returns for charitable contributions. One requirement is that the contribution should have a bank record, a payroll deduction records with the name of the organization, the amount, and the date the contribution was made. Different documentations are deducted differently and I will have to verify the amount of the contribution and whether the client received any benefits as a result of the contribution. The law requires that in case one receives benefits from donating to the organization, the tax return will be made on the amount exceeding the fair market value of the benefit that was received (Zampelli and Yen, 2017). Some contributions are also not deductible. Contributions made to an organization that is not recognized or contributions made under required market value would not qualify for tax deductions.
The bible teaches that we should strive to do what is right and honest. As a tax practitioner, I should consider the case and choose to be honest and follow the required protocols as it is required. Doing the right thing and committing one’s work to do one’s work with honesty should guide me into refusing to follow through with the tax return. Paul wrote a letter to Corinthians and admonished them by stating “For we are taking pains to do what is right, not only in the eyes of the Lord but also in the eyes of man.” in 2 Corinthians 8:21 (The holy bible, New International Version). We can learn from this verse that it is important to do what is right not only in the eyes of the lord but before other men. Honest and the right decision should be undertaken even when it is painful and difficult.
References
Braithwaite, V. (2017). Taxing democracy: Understanding tax avoidance and evasion . Routledge.
Zampelli, E. M., & Yen, S. T. (2017). The impact of tax-price changes on charitable contributions to the needy. Contemporary Economic Policy , 35 (1), 113-124.
The Holy Bible, New International Version. (2002). Grand Rapids: Zondervan Publishing House.
