My second thought is that I am happy again to avoid helping people fill out their forms, excepting my children's. In part, I don't want to help other people figure out what is going on with respect to this transaction or that event. I am not a tax expert, so I could not help with the complex things anyway, but I don't even want to help with the simpler things. The IRS has convoluted the English language, higher mathematics, symbolic logic, and common sense. As Albert Einstein remarked, "The hardest thing in the world to understand is the income tax."

The biggest reason that I do not offer my services in filling out those enigmatic forms is that I am usually appalled at the beneficiary's insistence to amend the numbers. In his favor, of course. When I have aided a friend or a relative on some point of the tax law, I would research the matter and communicate the essence of the rules. You can do this and you cannot do that. Almost every time that I have done this, the person who asked for my assistance insists that I am wrong. He or she asserts that it is permissible to include these deductions or not report these revenues. And it doesn't matter what documents I use to prove my understanding, he or she dismisses them and proceeds to compute the tax liability without my clarifications. I then run away and hide; I don't want my name associated with that return.

What is it about income taxes that turns what appears to be honest people into liars and cheats? Why are so many returns fraudulent?

As an aside, let's note that the use of software packages such as Turbo Tax does not improve the ethical climate. The old adage of "garbage in, garbage out" applies to tax software as well as to other forms of electronic programming. A liar can prevaricate in any medium.

I am not sure how to answer the question of why we sell our souls whenever it turns to tax season without waxing philosophical or invoking religious conversation. Perhaps it will suffice if we just acknowledge the reality that fibs are bountiful on tax forms. It would at least be a start to acknowledge the problem.

The country could then re-examine the tax system that we have and maybe, some day, amend it to something fairer, easier, and more auditable. Other than job protection for tax lawyers and tax accountants and the creation of legal vehicles for the rich to avoid paying much in taxes, the current tax system itself is an abomination. Congress would get rid of it except that the members' patrons' don't want to abolish the current system.

Back to the central question: why do we lie and cheat when we report our income taxes? Maybe we think the system unfair and this is our way to rebel. Maybe we think Congress wastes our money and this is how we fight back. Maybe. But the most unsavory possibility is that, deep down, we are not as honest as we want others to think or as we wish to portray ourselves to others.

Russell Gough in "Character is Destiny" says that character requires habit building. One is ethical when he or she practices ethics on a consistent basis in a variety of circumstances. A person of great integrity would practice ethics in many situations, including filling out tax forms. Unfortunately, this tax season echoes the haunting refrain that, generally speaking, Americans may not have as much character as they espouse.

This essay reflects the opinion of the author and not necessarily the opinion of The Pennsylvania State University.

Return to The Accounting Cycle

J. EDWARD KETZ is accounting professor at The Pennsylvania State University. Dr. Ketz's teaching and research interests focus on financial accounting, accounting information systems, and accounting ethics. He is the author of Hidden Financial Risk, which explores the causes of recent accounting scandals. He also has edited Accounting Ethics, a four-volume set that explores ethical thought in accounting since the Great Depression and across several countries. He is the co-author of a monograph, Fair Value Measurements: Valuation Principles and Auditing Techniques (with Mark Zyla, Managing Director, Acuitas, Inc.) to be published by BNA.