TEI staff participates in ethics panels, University of Chicago Tax Conference.

Position:Tax Executives Institute

Three members of TEI's professional tax staff have participated in educational events sponsored by other organizations within the last two months. TEI General Counsel Mary Lou Fahey addressed the University of Chicago Annual Tax Conference, and Executive Director Timothy McCormally and Tax Counsel Daniel De Jong spoke at sessions hosted by the Michigan Association of Certified Public Accountants and New York University.

Messrs. McCormally and De Jong's topic was tax ethics. Most recently, they participated in a panel at New York University's 29th Institute on State and Local Taxation, held December 13-14, 2010, in New York City. The session, Ethical and Professional Challenges Confronting State Tax Professionals Today, focused on a wide range of topics from Circular 230 to civil penalties to federal-state information sharing. Terry B. Cosgrove of Gough, Shanahan, Johnson & Waterman in Helena, Montana, and Todd A. Lard of the Council on State Taxation (based in Washington, D.C.) also participated on the panel.

The panel offered the following definition of "ethics": "Ethics are the set of 'principles of conduct or behavior governing an individual or a group (as the members of a profession).' The term has been more collegially defined as 'what you do when no one is looking.' In the 21st Century, however, 'the age of transparency,' someone is always looking (a la red light cameras)." The TEI staffers explained that personal considerations--such as individual religious, philosophical, or moral standards--also play a role in how tax professionals make ethical decisions. Additionally, organizational considerations enter into the equation, such as the Wall Street Journal Test (i.e., Would you like to read about this transaction on the front page of the WSJ?) and the WWMD test (i.e., What would Mom do?). Offering conference attendees another touchstone, they quoted Mark Twain, "If you tell the truth, you don't have to remember anything." Some of the ethical questions posed during the one hour session were:

  1. A taxpayer decides not to contest an assessment because the additional tax does not justify the expense of contesting it. Can the taxpayer prepare its returns for future years taking the same position underlying the earlier additional assessment?

  2. Would you sign a settlement agreement that you know contains an error in favor of your client?

  3. Would you enter into a settlement agreement without disclosing relevant information not requested by...

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