Please submit a reply of 200-250 words to this thread with two citations
When replying, try to address different aspects of the ethical argument including biblical integration.
One of my Hawaii clients, Ahi Corporation, had a productive and lucrative year last year and owes the IRS $100,000,000 by March 15th as a result of their good fortune. As of now, Ahi Corporation owes the IRS no fines or interest. Employees from Ahi approached me with the idea of launching a $100,000,000 “float.” This would necessitate Ahi’s sending its tax return and payment to the US Virgin Islands through courier. Once the tax return arrives it will be mailed to the IRS Service Center in Fresno through certified mail on March 15th. The projected time for the IRS to cash the check from the US Virgin Islands to Fresno is around six days at a minimum earning 7% after tax on the funds, accumulating $19,178 every day in interest, totaling $115,068 in interest earned on the floating check.
Based on the evidence provided above, I would urge my client, Ahi Corporation, not to participate in this transaction and to re-evaluate their personnel employment, as this type of transaction violates AICPA guidelines and is clearly unethical when handled in a professional setting. According to the employee, Ahi Corporation is attempting to exploit the system by delaying the flow of payments from Ahi Corporation to the IRS. This type of business approach is considered unethical because Ahi and the employee who offered the idea are aware that the check will take six days to be delivered to the IRS, and that the business would accrue interest on funds that are invalid during those six days.
According to code 0.300.060, “Due care is defined by the pursuit of excellence. Due care necessitates a member’s skill and diligence in carrying out professional responsibilities” (AICPA, 2018). It requires members to perform professional services to the best of their abilities, with consideration for the best interests of people for whom the services are provided, and in accordance with the profession’s public responsibility.
When recommending tax return positions, drafting, or signing tax returns, a member shall follow the standards set forth in the Statement on Standards for Tax Services (SSTS) No. 1. “CPAs should not recommend tax positions that exploit the audit selection process or serve as an arguing position solely to obtain negotiating leverage” (Rigos, 2017). Because the entire premise of using the float to collect extra interest revenue is based on Ahi Corporation’s tax return, SSTS No. 1 is the appropriate standard for the Ahi Corporation scenario. My advice to Ahi Corporation is to ignore their employee’s suggestion, and I will hold my ground with said advice.
“Treasures won via wickedness do not profit,” Proverbs 10:2 says, “but righteousness saves from death.” The urge to collect “treasures gained by wickedness…” is a biblical teaching that deals with minimalism, as it draws a link between Ahi’s employee’s plotting to act out of selfishness and the desire to acquire treasures.