I discussed the matter with the client and I was honest about my mistake. I also offered to pay the interest on the additional tax liability. It would be a negligible amount.
The client accepted what I said. This was then followed by “let’s leave as things as they are”. In other words not to amend the accounts to show the additional tax liability. What shocked me is at that moment in time I said okay to the client.
After discussing the matter with my staff, I realised what I did. I was participating in a fraud. I then asked myself why I agreed with the client. It was simply because of my fear of losing the client.
The same evening I was not comfortable about what I did. My guilty conscience was screaming at me not to do this. I then give it further thought. I asked myself what would be the worst that could happen if I said to the client that I am not at all comfortable about not declaring tax that was due. Further, I would be under an obligation to report the matter to the relevant channels if the additional tax liability was not declared.
The worst that would happen would be client moving on. I said to myself I am okay with this. I do not want a practice that participates or in any way be associated with questionable and illegal practices.
It was only when I faced reality my thoughts became crystal clear on the matter. In addition, I am being my usual honest to show another imperfect side of me.
None of us perfect beings. Greed, desperation, ambition, competition and many other pressures at times tempts us to act in a way that is illegal and/or unethical.
Thankfully, my call to the client the next day went well. The client accepted the additional tax liability needs to be declared.