Ethical Dilemma. The IRS tax code allows for the deduction of expenses incurred in traveling to a job interview. Sean, Erica, and their two children have used this deduction to fund their vacations for the last eight years.
Each year, several months prior to their vacation, Sean and Erica begin reviewing the online job ads in the cities they plan to visit. They each apply for several jobs for which they are qualified. Any applications that result in interviews are scheduled during their vacation. They are careful to deduct only those expenses allowed under the IRS tax code, such as mileage, meals (not the children's), and hotel and motel expenses (not their children's).
This plan has resulted in between $300 and $500 in allowable tax deductions each year. Sean and Erica have determined that in most cases they would not accept the jobs if offered; however, if the perfect offer presents, they would give it serious consideration.
a. Discuss whether you think Sean and Erica are being ethical in using the IRS tax code to fund part of the expenses of their family vacation.
b. Do you see other areas of the tax code discussed in this chapter that could be subject to abuses?