1. Identify the ethical issues Bill Adams should address.

2. What would you do about these issues if you were Bill?

corporations in the United ope. These gesellshaft currently include BASF Aktien- poration, and Snap-on fncon7, All rights Werke (BMW) A.G. in Germany as well reserved. States and Eur- as Deere & Company, Northern Cor- ap-on Incorporated in the 1977. All rights and Bayerische Motoren United States. Copyright 9 Tax Return Complications As Bill Adams packed his briefcase on Fri- . Dry-cleaning day, March 15, he could never remember dresses, sweater being so glad to see a weekend. As a senior these to be family dry-Cleamti tax manager with a major accounting firm, ere being paid by the Pi Hay & Hay, on the fast track for partnership, . Wages of $100 per he was worried that the events of the weektwelve-year-old son. could prove to be detrimental to his career. Bill telephoned Dr. Rim a bills for and so on. Bill believed week paid to Dr. Rim's Six months ago, the senior partners had rewarded Bill by asking him to be the tax Rim to review the expenses manager on Zentor Inc, a very important all that were personal, Dr client of the firm in terms of both prestig and fees. Bill had worked hard since then been deducting these items for years ensuring that his client received impeccable accountant sus asked Dr and remove picions confirm service, and he had managed to build a his previous accountant had not objected. In fact, it was his previous accountant who The telephone him to his brother, Dr. Rim, a general med- conversation ended abruptly when Dr. Rim good working relationship with Dan, the CEO of Zentor Inc. In fact, Dan was so income-splitting measure. 1 impressed with Bill that he recommended had suggested he pay his son a ical practitioner. As a favor to Dan, Bill agreed that Hay & Hay would prepare Dr. Rim's tax return. was paged for an emergency but not before he threatened to inform his brother that thee accounting firm he thought so highly of was behind the times on the latest tax planning This week a junior tax person had pre- techniques pared Dr. Rim's tax return. When it cameBill was annoyed with himself for having surprised to find that, although Dr. Rim's agreed to prepare Dr. Rim's tax return in the gross billings were $480,000, his net income first place. He was afraid of pushing Dr. Rim across Bill's desk for review today, he was too far and losing Zentor Inc. as a client as a for tax purposes from his medical practice as only $27,000. He discussed this with the result. He could not anticipate what Dan's glad to have the weekend to think this over tax junior, who said he had noted this also reaction to the situation would be. Bill was but was not concerned, as every tax return Just as Bill was leaving the office, the tax account informed "We have prepared the return him that the deadline had been missed for m information provided to us by the cli- objecting to a reassessment, requiring Zentor ent. We have not audited or otherwise attempted to verify its accuracy Inc. to pay an additional $1,200,000 in taxes. as Wednesday, March 13. The deadline w deducted by Dr. Rim in arriving at net friend of his at the Tax Depaotacia Department, and r. Rim in arriving at net the friend had agreed that if the Notice of On closer review, Bill discovered that the Objection was dated March 13, properly income: eals and entertainment. Bill signed, and appeared on his desk Mondat March 18, he would process it. Bill left his office with some major decisions to make felt that this was excessive and proba had not been incurred to earn given the nature of Dr. Rim's practice. bly income, over the weekend, Shift