Jews and Taxes

Jewish ethics demand that we be scrupulous in paying taxes.

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A good way for the average person to distinguish between a prudent plan to save money and an illegal and immoral scam--which may ulti­mately be extremely expensive--is to ask a reputable tax adviser. If this professional clearly advises that you need not declare sheltered income, then you may assume that your acts are solidly defensible. But an evasive answer, such as "Nothing will happen to you if you don't report," or "I know that many people employ these methods," is a sign of danger.

Another guide is the degree of secrecy called for. Watch out when ordinary, prudent discretion crosses the line into "cloak and dagger" activities, like wiring small amounts repeatedly, moving cash, or using way stations in moving money.

An ordinary person can rely on a reputable accountant, but the ac­countants themselves cannot just pass the buck. They have to answer to a higher authority--not to mention the Higher Authority. Their obligation to know and conform to generally accepted accounting procedures is legal, ethical, and professional. An accountant who deviates from these principles is in violation of the professional code of conduct and may be subject to prosecution. From a Jewish point of view, the accountant is abetting wrongdoing by the client.

Of course an accountant, like a lawyer, is permitted to interpret the law in a new light--if the interpretation is professional and defensible. But it is unethical to make an audacious claim, based on the hope that the tax authorities won't notice.

Sales Tax

QUESTION: Some businesses in my area are run on a "cash-only" basis. Can I patronize these businesses, or is this encouraging tax evasion?

ANSWER: There are three possible answers to your question:

1. It's fine; paying taxes is the proprietor's responsibility, not yours.

2. It's all right to patronize these businesses, but demand a receipt so that you are not encouraging deceit.

3. You should boycott dishonest businesses.

Which answer is correct? All three. It depends on the exact situation. Jewish law distinguishes three levels of cooperation with wrongdoing and prohibits anything that would abet wrongdoing. The three levels, in decreasing order of gravity, are:

• Enabling a transgression. If the transgression could not take place without your participation, you are enabling the wrongdoing to take place. This is categorically forbidden by the biblical injunction, "Do not place a stumbling block before the blind." Our tradition explains that this refers primarily to a spiritual stumbling block, which causes someone to transgress.

• Abetting a transgression. This means that you take an active role in the unethical activity, but if you didn't do so, someone else would.

• Condoning a transgression. Normally, we are obligated to protest wrongdoing. Whenever we remain silent and even benefit from it, we may seem to be condoning it. The ethical status of condoning depends on the degree of identification we show with our participa­tion as well as our ability to make an effective protest; these factors vary according to the situation.

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Rabbi Asher Meir

Asher Meir received his Ph.D. in economics from MIT, and received his rabbinic ordination from the Israeli Chief Rabbinate after 12 years of study at Israeli Rabbinic Institutions.