24 Oct

Calculating Income Using the Net Worth Method of Proof

In divorce cases, forensic accountants can use the “net worth method of proof” to calculate income. This is used to search for hidden or unreported income. Rather than simply taking a spouse’s word for it that his or her income is X, we can do an analysis like this to try to verify the claimed income.

This method of proof is one part of a lifestyle analysis, in which we are analyzing the party’s lifestyle and determining if that lifestyle matches the income that is being reported. This video explains the process of completing the net worth analysis.

19 Sep

Why and How to Do a Lifestyle Analysis in a Divorce

In this video, Tracy Coenen explains the purpose and process behind doing a lifestyle analysis in a divorce case. There are three main reasons why a lifestyle analysis may be done:

  • To determine the amount of money needed to continue living a lifestyle consistent with the lifestyle enjoyed during the marriage (This relates to child support and alimony.)
  • To find hidden sources of income
  • To find hidden assets

24 Jul

Analyzing Tax Returns in Divorces

Income tax returns are an important piece of financial information in a divorce or child support case. There is so much information that can be obtained from the tax returns, and if we have several years of data, we can make comparisons from year-to-year. In the video below, Tracy talks about the financial data she analyzes on the income tax returns and what these items may tell us about the financial situation of the family.

09 Jul

Bank Deposits Method to Find Unreported Income

When the Internal Revenue Services suspects that a taxpayer has unreported income, the agents can use one of several methods to uncover that income. These methods can also be used to help calculate hidden income in a divorce or child support case. One such method used to determine unreported income is the bank deposits method, in which the forensic accountant analyzes bank deposits. In the video below, Tracy explains how this is done.