Hidden Assets, Divorce And Forensic Accounting: What Should You Know About Them?

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Hidden Assets, Divorce And Forensic Accounting: What Should You Know About Them?

13 July 2016
 Categories: Finance & Money, Articles

If your spouse files for divorce, you may expect to receive a fair divorce settlement afterward, especially if the person owns a successful business. But if your soon-to-be ex doesn't reveal the true value of their business assets, you may not receive the financial support you expect. One of the things you can do to protect your future is add a financial accountant to your divorce case. A forensics accountant can help you locate your divorcing spouse's hidden assets, including financial accounts hidden overseas. Here's how your soon-to-be ex can hide assets and what you and a forensic accountant can do to find them:

How Can Your Divorcing Spouse Hide Assets?

Although family law requires divorcing couples to reveal their assets, income, properties, and other finances during the proceedings, some spouses may not do so. One of the things your future ex-spouse might do to avoid paying alimony and child support is commit tax fraud. Tax fraud occurs when a person or business doesn't report all of their income to the Internal Revenue Service as a way to evade their tax obligations.

An individual or company can also commit tax fraud by reporting higher business expenses than they actually have in order to keep a certain percentage of their income for personal gain. For example, your divorcing spouse may receive cash for some goods or services instead of using credit cards, checks and other methods that leave physical evidence behind. Your divorcing spouse may consider cash harder to track down than credit card and bank statements.

Your divorcing spouse may take their illegal actions further by wiring or transferring the funds overseas. The spouse can also open multiple bank accounts in another country and use them to hold funds from the business. You should understand that you don't have to use debit cards, credit cards or checks to wire funds. A number of companies allow people to transfer funds by cash, as well as by the methods mentioned above. 

To avoid the problems above during and after your divorce, it's critical that you take action now.

What Can You Do to Find Your Divorcing Spouse's Hidden Assets?

You can ask your divorce attorney to hire a forensic accountant to investigate your future ex-spouse's finances. A forensic accountant is a specialized financial expert who analyzes, locates and obtains information pertaining to illegally hidden assets and funds. An accountant can do a number of things to assist you, including digging into your divorcing spouse's financial records.

One of the things an accounting expert might look for is how your future ex-spouse reports their company's earnings and expenses. There may be discrepancies between what your divorcing spouse reports to the IRS and what they actually earn during the year. For example, your divorcing spouse may keep multiple financial records for the company. One record may include credit card receipts and cashed checks. The other record may reveal cash receipts for services and products. If the money reported to the IRS doesn't add up to the records kept by your soon-to-be ex, an accountant may use it to show that the spouse committed fraud or tax evasion.

A forensic account may look for evidence of overseas money transfers. This may include checking the computer systems of local and state wiring companies for records of the transactions. Most wiring companies keep records of their customers' transactions and other identifying information to combat fraud and other criminal behavior, including their customers':

  1. Names
  2. Contact phone numbers
  3. Locations

The amounts sent to the recipients or banks should also be on the form. The accountant may request a court order to obtain the money wiring companies' computer records for your case. However, you should discuss this part of the investigation with an forensics accountant when you meet with them and your divorce attorney.

For more information about your case, contact an forensic accountant today by visiting a site like http://www.eppsforensics.com, or you may request that your divorce attorney do it for you.