Wednesday, June 17, 2009
Several recent newspaper headlines and official press releases have reported instances of tax fraud or tax evasion involving rabbis and others who nominally or purportedly identify as religious Jews. There is an obvious disconnect between such reported misdeeds and Jewish ethical principles as enunciated in the Halacha (Jewish law). Any system of taxation is replete with ethical issues, and the American system is no exception.
This article will address the ethical issues and dynamics in the American system of taxation, and critique them from a Jewish law perspective. First, a discussion on the legitimacy of taxation schemes will be presented. This article will then discuss the taxpayer's obligations, followed by a discourse on the ethics of tax administration. Tax practitioners such as attorneys, accountants, and enrolled agents play a key role in the American taxation system; accordingly, there will be a discussion on taxation ethics as they relate to such practitioners. Because tax-exempt organizations are so closely intertwined with Jewish communal life in America, ethical issues relating to the donors and management of tax-exempt organizations will also be covered. This Article will conclude that the ethics required by Jewish law are most compatible with American taxation ethics.