If something taxes your conscience, confront it

It's funny sometimes who considers us their friend.

A reader in the Midwest writes to tell me that one of her neighbors who considers my reader a friend runs a service business out of her home but has not reported any income for tax purposes for at least the past five years.

"We live in a good school district and I struggle to pay federal, state, city, and school district taxes," writes my reader who is a single parent. "It seems unfair that she would not have to pay her fair share."

But the reader observes that there seems to be some "unwritten code" that keeps telling her she should mind her own business and not turn her into the tax authorities -- especially since the neighbor considers her to be a friend.

The possible tax laxness is not the friend's only behavior that eats at my reader. She also doesn't care for some other choices she has made, like opting for cosmetic surgery while "telling everyone she cannot afford speech therapy for her son."

Not paying taxes is just "icing on the cake" when it comes to bad behavior, the reader writes, but it's something she perceives she can do something about.

She wants to know if turning her neighbor into the tax authorities is "the right and patriotic thing to do, or is it in some way wrong in this case?"

It's not wrong to alert authorities if you believe someone is violating the law. But the question for my reader has to be whether she's willing to alert the authorities without any proof other than the braggadocio of her neighbor.

Choosing cosmetic surgery over the needs of a child may call her neighbor's parenting skills into serious question. But unlike the results of the cosmetic surgery that my reader believes she can plainly see, without documentation or evidence of wrongdoing, if she notifies tax authorities she might be drawing attention to a neighbor who is guilty of nothing more than bragging about getting away with something.

If the neighbor seemed remorseful about having neglected to pay past taxes, my reader could advise her to consult a tax professional who specializes in helping to rectify such circumstances. Coming clean and looking for a way to make restitution seems a more favorable route than waiting for the tax authorities to catch her unlawful actions.

If the neighbor's actions truly disturb my reader, the right thing for her to do is to let her neighbor know that she finds her behavior objectionable. The reader can comment as much as she wants about the fairness of the situation and how if she has to pay taxes so should her neighbor. But ultimately, it should be the legal and civic responsibility that draws her to pay what she owes.

Then, the reader can offer to help the neighbor find a professional who will help her to set things straight. That's a first, reasonable response to the neighbor's alleged actions. Perhaps the neighbor will come clean about whether her claims are truthful. Perhaps she won't. But the reader will let her know in no uncertain terms that she finds her claims of being a tax scofflaw to be objectionable. 

Jeffrey L. Seglin, author of The Right Thing: Conscience, Profit and Personal Responsibility in Today's Business and The Good, the Bad, and Your Business: Choosing Right When Ethical Dilemmas Pull You Apart, is a lecturer in public policy and director of the communications program at Harvard's Kennedy School. Follow him on Twitter: @jseglin 

Do you have ethical questions that you need answered? Send them to rightthing@comcast.net. 

(c) 2012 JEFFREY L. SEGLIN. Distributed by Tribune MediaServices, Inc.