Dear Jeanne and Leonard: I was going to trade in my 9-year-old Mazda Miata for a new Mazda3 when the mechanic who has been servicing the Miata told me he would like to buy it for his daughter. We’ve now agreed on a price of $8,500. But when I sign the car over to him, he wants us to tell the Department of Motor Vehicles that he paid only $5,000. Doing so would save him several hundred dollars in sales tax, and he says people underreport the sale price all the time when they transfer the title on used cars. Still, I feel uncomfortable about this. Your thoughts?
– Squeamish in Salinas, Calif.
Dear Squeamish: It depends on how anxious you are to have this guy service your new car.
Seriously, your mechanic is correct that people frequently misrepresent the price for which a used car has been sold. Their justification? That they’re not really cheating on taxes so much as exploiting a loophole in the collections process – a rationalization that’s the ethical equivalent of saying there’s nothing wrong with cheating someone who’s too dumb to catch on. Plus, some will argue that it’s a matter of principle – that the state has no business taxing person-to-person transactions or taxing the sale of a used vehicle when it has already taxed the sale of the car when it was new.
While the latter arguments may have merit, the fact is, citizens don’t get to decide which taxes they think are reasonable and ignore the rest. So no wonder you feel uncomfortable.
Any way you slice it, your mechanic is asking you to help him commit tax fraud.
Dear Jeanne and Leonard: My older sister and I have lunch together every few weeks, and when we do, we take turns paying the check. Since she and her husband have more money than my husband and I do, she typically expresses a preference for less expensive restaurants when it’s my turn to pay. I know she means to be nice, but still I feel patronized, as if I were a “poor relation.” What’s the best way to put a stop to this? For the record, I can afford to pay for lunch at any of the restaurants we go to.
– Little Sister, Connecticut
Dear Little Sister: What’s wrong with expressing a preference for a more expensive restaurant when it’s your turn to pay? Or does Alpha Sis control the selection of restaurants?
If that’s the case, all you can do is tell her how appreciative you are of the consideration she shows for your wallet, but that there is no need to economize when lunch is on you. And when it is, insist on going to restaurants as pricey as those your sister pays for. Big sisters can be surprised that the little sisters they feel they’ve looked after for most of their lives are less in need of their help than they imagined. But most are happy to roll with the punches.
Please email your questions about money and relationships to Questions@MoneyManners.net.