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Honor and Taxes

Readers of The New York Times may already be aware of the story in Wednesday’s Business section about Washington and Lee alumnus Charlie Freret  (Class of 1970), his federal income taxes and the Honor System. If you haven’t read the whole story, here’s the link.

The bottom line is this: Charlie discovered a flaw in the TurboTax software that incorrectly deducted expenses for health insurance premiums and wound up underpaying taxes. In Charlie’s case, the underpayment meant his tax refund would have been $600 more than it should have been.

Once Charlie spotted the error, he contacted Intuit, the software company that makes TurboTax, and reported the problem. In turn, Intuit reported the issue to the I.R.S. and the Treasury Department. But, as the Times’ story explains, auditors were unable to duplicate the error, so Charlie contacted media about it, believing others ought to be warned. And why worry? Why not take the $600? Here’s the essential paragraph in the Times:

“It seemed like the right thing to do,” said Mr. Freret, 63, adding that he has always tried to adhere to the code of conduct instilled at his alma mater, Washington and Lee University. “The honor code called for you to be a Southern gentleman: ‘Don’t lie, don’t cheat and don’t steal.’ ” he said.

Charlie, an all-conference defensive back for the Generals’ football team in his playing days, had worked as a lawyer with the Department of Veterans’ Affairs before retiring in 2004.

On Saturday, April 10, Charlie appeared on Fox News to discuss the matter. He added the fact, not in the Times, that he also could have saved $400 in state taxes.

You can watch Charlie’s interview on Fox at this link.

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