united-states tax-law whistleblower
Is it advsable to &quot;blow the whistle&quot; on illegal tax exemption?
<p>I've been working for a company for under a year and I have many responsibilities all related to technology. Recently, I was tasked with buying new tech equipment for employees.</p>

<p>We had a major delay in shipment from our normal supplier so I was told to do research on competitors. After the quote arrived I realized that our previous supplier didn't charge retail tax, but this one did. I mentioned it to my boss (the company owner) and he said something along the lines of "yeah, they think we resell the equipment instead of using it internally. If we ever get audited we're in trouble."</p>

<p>My job is to just get the quotes, do research on the equipment, and make a request for purchase. Is it possible I will also be in legal trouble? Should I report this to my state's revenue department?</p>

<p>This isn't the first time that I have seen unscrupulous business practices. As an example we <em>almost</em> threw away large batteries in the dumpster, but it was prevented.</p>

<p>Oh f***. The whole thing looks very much like tax evasion. And your problem is that you know about it, so if this is found out, you are part of it. You will most likely be in legal trouble yourself. </p>

<p>Before you proceed, you probably want to consult a lawyer, and/or post on workplace.stackexchange.com (which may be able to give advice how to keep your job and keep out of jail at the same time).</p>

<p>In the US, sellers are supposed to pay the state sales tax on a retail sale (the obligation is on the seller, not the buyers). Of course, sellers almost always – but not always – pass that cost on to the buyer. Sometimes the retailer pays the tax for the buyer, as a promotional deal. If a buyer presents a reseller permit, the seller does not incur a tax liability, but the buyer does. The responsibility then usually (probably always) devolves to the buyer to report and pay. The salient regulations for Washington are <a href="http://apps.leg.wa.gov/wac/default.aspx?cite=458-20-102" rel="nofollow noreferrer">here</a>, and your state surely has something similar. There are <a href="http://app.leg.wa.gov/RCW/default.aspx?cite=82.32.290" rel="nofollow noreferrer">criminal penalties</a> for what you described, for example it is illegal</p>

<blockquote>
  <p>For any person to aid or abet another in any attempt to evade the
  payment of any tax or any part thereof; For any purchaser to
  fraudulently sign or furnish to a seller documentation authorized
  under RCW 82.04.470 without intent to resell the property purchased or
  with intent to otherwise use the property in a manner inconsistent
  with the claimed wholesale purchase</p>
</blockquote>

<p>but you don't seem to have done either of these things. Washington state law does not posit a legal duty for employees to turn in the boss, but there are 49 other states. If the boss won't correct the error and you decide to report him, you may get fired (anonymity is not worth much if it's obvious from the circumstances that it was you). You could then sue the boss for firing you, because although employment is at-will (I assume, in your state), there may be a "public policy" exception, whereby they can't fire you for a reason that contravenes a clear public policy – which probably includes "reporting illegal conduct". General "whistleblower" laws probably are not applicable, which pertain to firing public employees reporting official misconduct.</p>

<p>So yeah, get a lawyer.</p>
