ETHICAL DILEMMA #1 Tax

ETHICAL DILEMMA #1 Tax - let the carpenter make his own...

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ETHICAL DILEMMA #1 – DUE SEPTEMBER 7 The roof of your office building recently experienced some damage as the result of a storm. You are negotiating with a carpenter who has quoted two prices for the repair work: $600 if you pay in cash (“folding money”) and $700 if you pay by check. The carpenter observes that the IRS can more readily discover his receipt of a check. Thus, he hints that he will report the receipt of the check (but not the cash). The carpenter has a full-time job and will do the work after hours and on the weekend. He comments that he should be allowed to keep all he earns after regular working hours. Evaluate what you should do including whether you have an ethical obligation to pay the higher price. As a buyer in need of having the carpentry work done, I wouldn’t show much concern for what the carpenter does on his part. Whether I pay with cash or check, it doesn’t affect my ethical decision. Some people may see it as supporting someone else’s bad decision, but I would
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Unformatted text preview: let the carpenter make his own choice. If the carpenter offers to work at a cheaper price for the same work, I would pay the cheaper price, because to me that is only common sense. However, it is very unethical for the carpenter to offer cheaper labor in exchange for a less traceable payment method. In this situation, the buyer and seller are the stakeholders it would benefit to pay with cash. Although, you may experience a moral burden later the immediate result is beneficial. The harm would be minimal directly to the country because it would cause the carpenter to pay less in taxes. Right now this is a small gain or loss but over time this could become very large if he chooses to repeat this unethical behavior. The most ethical decision in this situation would be to just report the work you perform and perform the work you report. Plain and simple, the price you choose does not matter when you document your transactions and pay the proper tax on it....
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This note was uploaded on 03/26/2012 for the course ACCT ACCT210 taught by Professor Challanworthington during the Spring '10 term at S. Alberta Tech.

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