Proving hidden assets and unreported income can be difficult. Income tax returns can provide a road map for finding income-earning assets and asset sales. They also identify sources of income, including W-2 wages, interest income, dividends, rental income, and capital gains or losses. Each page of the tax return and all supporting schedules should be carefully examined for clues.
For example, Schedule A, “Itemized Deductions,” may show a property tax deduction for undisclosed real estate assets. Schedule B, “Interest and Ordinary Dividends,” may highlight foreign accounts and foreign trusts. And Schedule C, “Profit or Loss From Business (Sole Proprietorship),” might identify hidden business assets. Form 6521 contains the alternative minimum tax (AMT) calculation. Whether the taxpayer has incurred AMT tax could also help identify hidden assets, such as real estate and incentive stock options.
Other documents to request during discovery include:
A public records search may also uncover hidden assets. To unearth asset purchases and transfers, an expert will need personal identification information for both spouses and other relevant individuals, such as friends and family members, who might be complicit in the diverting marital assets. This includes full legal names and variations (nicknames, abbreviations, and common misspellings), as well as known aliases.
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