Tracy Coenen discusses the early stages of a financial investigation related to a divorce. When evaluating the finances of a business, Tracy explains what to look at first and how those items are analyzed.
When a divorce involves a business, we often ask for a copy of the general ledger. This includes the detailed accounting records for a specified period of time. What can we find in the general ledger? Watch the video to find out!
While consumers generally hate income tax returns because of their complexity, they can be invaluable sources of information in divorce proceedings. Not only do they provide insight into prior years’ earnings, they can also point to assets and sources of income. They may be used to unearth financial information that a spouse omitted from the financial disclosures, and can hold subtle clues to otherwise unknown financial details.
For example, assets are sometimes sold by the spouses to generate cash. Many times this may be a taxable transaction reported by the purchaser to the taxing authorities. Therefore, such a transaction will be required to be reported on the income tax return, and this may help unearth a hidden asset or provide clues to concealed cash.
Tracy talks with Miles Mason, JD, CPA about some of the common financial lies told by spouses during divorce.
Yesterday Teresa Giudice and Guiseppi (Joe) Giudice were indicted by a federal grand jury in Newark, New Jersey on the following charges:
- Conspiracy to Commit Mail Fraud and Wire Fraud
- Bankruptcy Fraud
- Bankruptcy Fraud – Concealment
- Bankruptcy Fraud – False Oaths
- Bankruptcy Fraud – False Declarations
- Failure to Make Tax Return
The mail fraud and wire fraud counts are related to false statements and documents that the Giudices allegedly submitted in order to get loans. Banks which loaned the Giudices money included Park Avenue Bank, Wachovia (now Wells Fargo), Sterling Bank, and Community Bank of Bergen County. Non-bank lenders include HomeComings Financial Network, Eastern American Mortgage, and Alterna Mortgage.
When a spouse knows that divorce is in his or her future, there are obvious steps to be taken. Securing a competent divorce attorney is one, and thinking about the division of assets and income is another. Yet when it comes to the financial details, clients often do not know what to do.
An uncertain financial future may scare the client, but the fear of the unknown makes it more important than ever to focus on protecting the client’s financial interests. The divorce attorney can provide this list of simple (but sometimes overlooked) tips to the client to help aggressively fight the financial case in divorce court:
Today I’m appearing on Blog Talk Radio with Steve Peskind of Peskind Family Law. We are talking about what happens when money goes missing in a divorce. I will be telling listeners about the value of a fraud examiner in a divorce case, some techniques I use to track down money that has been hidden, red flags of hidden income or assets, and a few of the more interesting divorce cases I have worked on. We will wrap up the show with a discussion of what a Lifestyle Analysis is, and how it can be used in a divorce to bring clarity to some of the financial issues.
The show will go live at 4:00pm central today, July 11, 2013, and then will be available later for those who weren’t able to listen live. If you are listening live, you will be able to call in and ask questions!
What documents must be obtained in a divorce proceeding when your forensic accountant needs to evaluate and investigate the income of the parties? In the below video, Tracy Coenen lists some of the basic documents that are needed to analyze wages, self-employment income, and investment income.
Below is a one minute clip of a portion of a video I did on accounting services in divorce and family law cases. I discuss the work that a CPA can do in divorce cases.
The issue of “income available for support” in divorces can be huge, particularly if only one spouse works. The issue gets complex if the earnings of one or both spouses are non-traditional. Regular wages are usually easy to evaluate in a divorce case, while income from businesses, real estate, and other investments become more complicated.
As a general rule, there is latitude in state courts when it comes to income and what is included or excluded for support calculation. There are general rules about the most common forms of income, but they don’t cover every issue and they all have a bit of “gray area” within them.
It is important to know the tricky kinds of income and cash flow that come up in divorces, as well as the varying views of how and why they should be included or excluded. Some of the types of income or expenses that may be treated differently from divorce to divorce and jurisdiction to jurisdiction include: