Carl Quandary, a tax accountant, has been working for his firm for several years and his career has been advancing well. Recently, based upon his excellent work, Carl has been assigned an important client, Marla Money. Carl's supervisor, Tom O'Blivious, explains how this tax engagement presents an excellent opportunity for Carl to promote his abilities and advance at the firm. Carl has been reminded frequently by his superiors of the importance of this client.

After reviewing Marla's previous return and current tax documents, Carl notices some unusual tax deductions. Carl is determined to take advantage of every legal tax deduction to minimize his new client's tax liability. However, he is cognizant of the standards of his firm and his profession.

At their first meeting, Marla is surprised and annoyed at the amount she owes the IRS based upon Carl's work to this point. Marla instructs Carl to report the questionable deduction although she could not support the amount with a business purpose or receipts. Carl is not convinced this deduction is appropriate. The meeting ends with the client insisting that this deduction be included on her current tax return. Marla threatens to take her business elsewhere if Carl continues to "give her a hard time."

To meet the filing deadline, Carl needs to inform Marla of his decision first thing in the morning. That evening, Carl sits at home with his new baby on his lap and considers his options.

What should Carl do?