Answer Happy

You previously worked for the Department of Revenue, a governmental agency in your town. You cut all ties with the agency after you left two years ago to start your own tax accounting business. One day you receive a call from the agency asking you to conduct a tax audit of taxpayers in the town. You do not conduct a financial statement audit of any of these clients. Assume the proposed arrangement is to pay you 25% of additional amounts collected following your audits of property tax returns plus 50% of all first-year tax penalties. What ethical issues exist for you in deciding whether to accept the engagement? Would you accept it? Explain. 2010