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  1. #1
    Join Date
    Mar 2009
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    4

    Question Told to Do Something Illegal and I Resigned - Now What?

    My question involves labor and employment law for the state of: Pennsylvania

    I have been all over the internet looking for a case even slightly similar to mine and can't find anything. I'm hoping someone here can help.

    I worked for a CPA firm for the past two years, after graduating from college. Long story short, earlier this year, I was directed to include large personal expenses in a business tax return, and to move income of another business into the next tax year so it could be "bonused out" before it became taxable. I discussed this with my supervisor many times, but he wouldn't budge. I decided to resign rather than submit materially false tax returns to the IRS.

    When I filed for unemployment, I stated my reason for resigning, and to date, the employer has not contested my unemployment claim (though they still have a few days to do so). I am now considering filing a civil suit to recoup the difference between my salary and the amount I will be paid by unemployment until I can secure a similar position.

    I can find no case history on any such a claim anywhere on the internet. I really feel this is a viable claim due to the circumstances of my resignation. Has anyone ever run across anything like this before, or might you have an idea where I might look? To the best of my knowledge, PA is the ONLY state in the union which doesn't have an on-line case history site.

  2. #2
    Join Date
    Jan 2006
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    28,079

    Default Re: Told to Do Something Illegal. I Resigned. Now What

    well, you did resign. You weren't fired so attempting to collect the disparity in the income levels most likely is not going to happen. You do not know if the company would have fired you for refusing to submit an illegal return and that is where you may have had some sort of claim.

  3. #3
    Join Date
    Jun 2006
    Location
    Massachusetts
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    Default Re: Told to Do Something Illegal. I Resigned. Now What

    I have never heard of such a case and for the same reasons jk states I doubt it would be successful.

  4. #4
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    Mar 2009
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    4

    Default Re: Told to Do Something Illegal. I Resigned. Now What

    The CPA code of professional conduct REQUIRES that you resign a position if you feel that doing your job will force you to perform an illegal act. IRS laws restrict you from filing a false return under penalty of civil and professional penalties. Going to jail or losing my CPA license was not an option for me.

  5. #5
    Join Date
    Sep 2005
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    Behind a Desk
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    75,396

    Default Re: Told to Do Something Illegal. I Resigned. Now What

    And had you reported the misconduct to a regulatory agency and been fired, rather than keeping it to yourself and quitting, you might have a whistleblower case.

  6. #6
    Join Date
    Mar 2009
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    4

    Default Re: Told to Do Something Illegal. I Resigned. Now What

    You might be right, however, in your scenario, I would have had to commit a federal crime and then blow the whistle on myself. Just seems to be counter productive to me.

    Are you aware of the new preparer penalties? Had I actually prepared those returns as instructed, I would have been guilty of committing a crime punishable by fines, imprisonment, and the loss of my license. No job is worth violating professional ethics or your own moral values ... much less going to jail. In addition, the law says you don't have to. Enron, Worldcom, and all the other CPA scandals have finally forced this profession to be a lot more ethical.

    I just don't know how standing by ethics helps to protect my income. I guess the moral of the story is, unless you're willing to be a cheat and a slime ball, you're SOL in this business.

  7. #7
    Join Date
    Jun 2006
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    Massachusetts
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    17,793

    Default Re: Told to Do Something Illegal. I Resigned. Now What

    No one said you should have violated the law.

    What was said is that since you quit, as opposed to being fired for your refusal, it is unlikely that a lawsuit against your employer would succeed.

  8. #8
    Join Date
    Mar 2007
    Posts
    9,085

    Default Re: Told to Do Something Illegal. I Resigned. Now What

    No one said you should violate the law. In fact, I know the above responders pretty well and I doubt they would even get close to crossing that line.

    What they are saying has nothing to do with your code of ethics. It has to do with labor law.

    if you, or anyone else, is asked to violate the law as part of your duties, the correct response is to first say that you will not do it. Then report it to HR. If neither of those actions change the request, you file with the appropriate agency and complain.

    Notice that nowhere did I say "quit".

    That is because if you file and they fire you for filing, you have a VERY strong case. Not to mention it is almost an admission of guilt on their part.

    You quit first. Yes, you can still file, but they will drag their feet on the case.

  9. #9
    Join Date
    Aug 2007
    Posts
    3,837

    Default Re: Told to Do Something Illegal. I Resigned. Now What

    Quote Quoting DeeO
    View Post
    My question involves labor and employment law for the state of: Pennsylvania

    I have been all over the internet looking for a case even slightly similar to mine and can't find anything. I'm hoping someone here can help.

    I worked for a CPA firm for the past two years, after graduating from college. Long story short, earlier this year, I was directed to include large personal expenses in a business tax return, and to move income of another business into the next tax year so it could be "bonused out" before it became taxable. I discussed this with my supervisor many times, but he wouldn't budge. I decided to resign rather than submit materially false tax returns to the IRS.

    When I filed for unemployment, I stated my reason for resigning, and to date, the employer has not contested my unemployment claim (though they still have a few days to do so). I am now considering filing a civil suit to recoup the difference between my salary and the amount I will be paid by unemployment until I can secure a similar position.

    Dee, this is a sticky situation. It put you, as the SC stated, "between a rock and a whirlpool". For a wrongful discharge case to be viable, since you resigned, this is problematic. The only possible exception is if the law treated such resignation as a "constructive dicharge". This means, although you did resign, it was forced on you.

    The facts do not seem to warrant it here even if there were a provision in PA law for constructive discharge. I don't know on that yet. Being fired for failure to violate public policy may be a cause of action in PA, yes. The crux would seem to be connecting such since you were not actually fired and also you seem to not indicate you told your employer you refused to do it! Did you? Or did you resign foregoing such?

    I can find no case history on any such a claim anywhere on the internet. I really feel this is a viable claim due to the circumstances of my resignation. Has anyone ever run across anything like this before, or might you have an idea where I might look? To the best of my knowledge, PA is the ONLY state in the union which doesn't have an on-line case history site.

    Most state laws online are NOT Annotated.

    Since federal law is involved, there may be some remedies in IRS case law that would support your position even though you resigned. Federal labor law is complex.

    Wait and see HOW they repsond to your unemployment claim. Once in writing, the facts may be more open (?). Once in writing, they are committed to thier answer.

    It may be a wise option to consult an employment law attorney, maybe one who also handles Federal labor law. As I said, as federal labor law is so complex, it takes the evaluation of a practicing attorney in that field to see if you have a valid cause of action.

  10. #10
    Join Date
    Jan 2006
    Posts
    28,079

    Default Re: Told to Do Something Illegal. I Resigned. Now What

    =DeeO;297116]The CPA code of professional conduct REQUIRES that you resign a position if you feel that doing your job will force you to perform an illegal act.
    CPA code of conduct is not statutory law and I doubt it states "if you feel that doing your job will force you to perform an illegal act".
    IRS laws restrict you from filing a false return under penalty of civil and professional penalties. Going to jail or losing my CPA license was not an option for me.
    I never suggested you break the law. You refuse to break the law and then let the employer make the next move. You left out a step and that may be your downfall.


    Did you ever present the problem to a person above your immediate supervisor? Could it be that the company was not aware of the actions your supervisor was directing you to undertake and would have welcomed your input?

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