If you take a cash discount from vendors who offer the deal to dodge taxes, you aren't at legal risk -- they are. Plus, can you spend your company's per-diem travel allowance as you please? By Knight Kiplinger, Editor Emeritus July 31, 2009 Q: Recently, I asked my new dentist the cost of a procedure. I was quoted a certain price, and then I was offered a 7% discount for paying cash, to which I agreed. When the work was done, I paid in cash and waited for my receipt. The secretary responded, "You don't get a receipt -- that's how the dentist can give you a discount." She as much said that he was planning not to report this as income. Am I at risk for participating in his tax evasion? What should I have done?Many vendors offer cash discounts of a few percent for legitimate reasons, such as saving the fee that credit-card companies charge them or not having to bill you and wait a few weeks for your check. But this is different -- a probable intent to defraud the government of taxes. You're not at legal risk because the responsibility to report income honestly is entirely the dentist's. You should have insisted upon a receipt, and if you were still refused, you could have threatened to report the dentist to his professional licensing board. In any event, consider finding a new dentist. Sponsored Content Q: Is it okay to keep my company's per-diem travel allowance (which is supposed to cover hotel and meals, among other expenses), even if I stay at the home of friends and have meals there? Our accounting staff doesn't ask for expense receipts, and they say we're free to use the allowance as we see fit. No, it's not okay. Your accounting staff probably means it's fine to shift genuine travel expenses within your per-diem allowance -- for example, staying at a less-expensive hotel in order to spend more on better restaurant meals. I doubt they mean it's acceptable not to spend any of the money and pocket it as compensation to yourself. This is your company's money, not yours. Have a money-and-ethics question you'd like answered in this column? Write to Editor in Chief Knight Kiplinger at firstname.lastname@example.org.