Law and Rights
Hiding assets during divorce? Prepare for a tax audit
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Law and Rights
Hiding assets during divorce? Prepare for a tax audit
Going through the divorce process can be a stressful experience. After all, couples are put in a position to split up nearly every aspect of the years they spent together. For some couples, addressing the financial aspects of divorce can become particularly contentious, since both parties want to maintain a sense of financial security after divorce.
From time to time, one spouse might be inclined to conceal marital assets during divorce in order to avoid splitting them. In addition to the possibility of a contested divorce settlement, this can also open the door to a tax audit conducted by the Internal Revenue Service.
Every year, people indicate their marital status on income tax filings to federal (and Georgia) officials. Because some people choose to hide assets during divorce, this could be viewed as a signal to initiate an audit. Even if both spouses have been transparent about their assets, and don't have to worry about tax violations, an audit is still an intimidating experience.
One other thing to keep in mind: Hidden assets might automatically be reported to the IRS. According to a report from Forbes, judges are legally bound to notify officials about potential inconsistencies in asset reporting found during divorce.
This may be of particular concern in divorces that involve a significant amount of assets. Transferring a large amount of funds, which is likely to happen in a high-asset divorce case, might be of particular interest for investigators looking to find issues in tax filings.
Ultimately, it may be best to work through divorce in an amicable fashion. By aiming toward a fair settlement, both spouses expect a stable post-divorce financial situation. Not only that, but this could prevent a whole host of unwelcome legal issues from springing up.
Source: Forbes, "Divorce Causes Tax Audits," Cameron Keng, Feb. 10, 2014
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Divorce is increasing, not decreasing, says new study A new study sheds some light on the U.S. divorce rate, and what has really been going on over the past few decades. It was thought that the divorce rate was decreasing since the 1970s, but the new...
- What Must Be Considered When Completing A High-asset Divorce?
On behalf of Regina Edwards of Edwards & Associates, Family Law Attorneys posted in High Asset Divorce on Friday, September 20, 2013. Divorce is usually a very complicated process. Not only does each spouse...
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On behalf of Edwards & Associates posted in Divorce on Tuesday, December 27, 2011 Statistics seem to support the theory that as the economy worsens, the divorce rate goes down. Many couples, fearing they can't make it on their...
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On behalf of Edwards & Associates posted in Divorce on Tuesday, January 4, 2011 In these tough economic times, many couples who have emotionally separated and would like to divorce are not doing so because they feel they cannot afford it....
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