Accounting for Good Intentions

Ethical Educator

Scenario:

When schools operated remotely at the start of the pandemic, a central-office supervisor set up a GoFundMe account for the hourly employees affected by the shutdown and subsequently distributed proceeds to them.

At year’s end, the GoFundMe payment was reported by the district as consulting income, resulting in tax liabilities for the employees, who cannot easily afford to pay.

A young accountant does not believe the IRS intended to tax such modest gifts, but her supervisor asks her to take no further action. The accountant writes to the IRS anonymously about what she considers an error by the school district that is harming low-wage workers.

A few days later, the accountant e-mails the superintendent, who had initially signed off on the GoFundMe plan.

What should the superintendent do?