What would you do in this situation?

You are a CPA with a medium-sized accounting form. One of your corporate clients is an electrical contractor in Atlanta. The client is successful and had $10 million in sales last year. The contracts involve private and government electrical work. Among the corporations expenses are $400,000 of kickbacks paid to people working for general contractors who award electrical subcontracts to your client, and $100,000 of payments to individuals in the electricians union. (These payments are illegal.) However, your client says that everyone in this business needs to pay kickbacks to obtain contracts and to have enough electricians to finish the projects in a timely manner. He maintains that it is impossible to stay in business without making these payments. In preparing its tax return, your client wants you to deduct these expenses. You inherited this client from a partner who retired last year, and this client is one of your largest and pays their bill to your firm like clockwork every month. Your client gives you a strong hint that if you will not deduct these expenses, they are likely to take their business elsewhere. WHAT WOULD YOU DO, AND WHY?