Month: March 2014

Income Tax Information Used in Family Law Cases

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This article was originally printed in the ABA Section of Family Law eNewsletter, February 2014.

Income tax returns and supporting information such as W-2s and pay stubs are the most common and basic documents which evidence income in family law cases. This article discusses the sources of income that are disclosed on a personal income tax return (Form 1040), and some ways the items can be evaluated to search for hidden income and hidden assets.

  • Wages – The figures reported on the income tax return should be matched to the W-2. The W-2 and the pay stubs will provide additional information on the employers, pay rates, total pay, certain benefits, and taxes withheld. Additional analysis may include tracing bank deposits to ensure that all wages were used for the benefit of the family.
  • Taxable Interest and Tax Exempt Interest – These items of income must be considered when calculating income available for support. They are also important because they can point to bank, investment, and brokerage accounts that may not have been specifically disclosed in the family law case.

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How a Lifestyle Analysis Can Be Used in a Divorce Case

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A lifestyle analysis is the process of tabulating and analyzing the income and expenses of the parties. The lifestyle analysis is then used to determine the standard of living of the parties, which will influence support calculations, and possibly property division.

Calculating the lifestyle of the spouses prior to separation can provide insight into the lifestyle the married couple enjoyed and the cost of that lifestyle, as well as the income that was or is required to fund the lifestyle of the married couple. The results may be used to prove a spouse’s financial needs following divorce. In other words, a detailed analysis of the spending during the marriage can be the basis to calculate the funding the spouse needs to maintain a similar lifestyle after divorce.

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Kevin Trudeau Is On His Way to Prison!

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kevin-trudeau-goes-to-prisonHabitual criminal Kevin Trudeau is ending up exactly where he belongs…. in prison! Trudeau has a lengthy history of legal problems. He spent 2 years in prison in the 1990s for credit card fraud. In 1996 he settled charges that he was operating an illegal pyramid scheme called Nutrition for Life. In 1998, Trudeau was fined $500,000 for making false claims in infomercials.

Then came Trudeau’s book The Weight Loss Cure ‘They’ Don’t Want You to Know About. The problem was that he misled consumers with his infomercials, making them think his weight loss book would show them an easy weight loss method which allowed them to eat whatever they wanted when they were done. But the diet was not simple. It required colonics performed by a licensed practitioner and injection of a human growth hormone, and it never really ended. Dieters really couldn’t eat whatever they wanted, because the book said they should only eat organic food and avoid brand name foods, fast food, and meals at chain restaurants.

Read moreKevin Trudeau Is On His Way to Prison!

More on the Tim Sykes Millionaire Trading Challenge

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steal-moneyIn the last couple of days, I have had an email exchange with a purported journalist who is interested in the Timothy Sykes Millionaire Trading Challenge. Because I’ve written about Tim’s Trading Challenge before, he wanted to ask me some questions. The writer is interested in doing a negative piece on Tim and students, and since I’m a forensic accountant in the trading challenge, he thought I could provide some information.

He wanted to know if I have done a formal investigation of Tim Sykes, have reviewed his brokerage statements to verify his trades, or verified the returns of Tim’s students. The answer to all of these questions is NO. Why have I not investigated Tim and his students? No one has retained me to do so.

Read moreMore on the Tim Sykes Millionaire Trading Challenge

Why Retain a Forensic Accountant in Your Divorce Case?

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divorce financial analysisOne of the hot new things in the area of divorce, especially for high net worth clients, is using a law firm that has forensic accountants on staff. Sometimes the divorce attorneys themselves have credentials in the area of forensic accounting, such as a CPA license, CFE (Certified Fraud Examiner) credential, or CFF (Certified in Financial Forensics) credential.

These law firms tout a number of advantages of retaining them:

Fail to Educate Children, Get a $7.1 Million Bonus Courtesy of the Taxpayers

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In what may be a flipping of the bird to Milwaukee taxpayers… Gregory Thornton, outgoing superintendent of Milwaukee Public Schools gave out $7.1 million in bonuses. $3.5 million of the loot was given to support and administrative staff in January, and $3.6 million is being given to teachers and psychologists in March. This is considered … Read more Fail to Educate Children, Get a $7.1 Million Bonus Courtesy of the Taxpayers