Tax Dilemma

I recently realized that a non-cash benefit I have been receiving from my employer for the last few years is actually subject to income tax. (The value is over $1000, but we were unaware it was taxable.) I discovered that there is a way to make a “patriotic” donation to the U.S. government, so I was thinking of figuring out the tax I should have paid and donating this amount instead of amending all of my returns or having my employer amend my W-2. However, in addition to wanting to avoid the burden of filling out all of the forms, I would also be doing it to avoid having my employer be audited, as they have provided this benefit to lots of employees without taxing them. Would it be wrong to make the donation to prevent my employer from being audited and getting caught?

Have you already filled out your forms for 2009?
If not, you could just add this under taxable income, (whatever category it falls under - perhaps Other Income) and refigure your tax.
Hopefully, your employer will now advise his employees that this benefit is taxable.
I don’t know that I would worry about past years. But I am not too thrilled with how the government always spends my taxes. Perhaps a tax accountant will give you a different perspective – but unfortunately, those folks are all swamped right now, not too likely to be posting here.

If you make a donation to placate your conscience, and someone does bring this to your employer’s or the IRS’ attention, you will end up being liable for the tax and penalties anyway, won’t you?

This is not your burden, it’s your employer’s, if they were supposed to deduct tax for this. If you are simply liable for it, then go to a tax adviser and amend your returns.

I wouldn’t want this hanging over my head.

DISCLAIMER: The views and opinions expressed in these forums do not necessarily reflect those of Catholic Answers. For official apologetics resources please visit www.catholic.com.