Hiding assets through tax overpayment

On Behalf of | Apr 14, 2020 | Property Division

People look for all sorts of ways to hide assets. Sometimes, it’s as simple as starting another bank account. Other times, they team up with friends or family members so that they can “give” them money and get it back after the divorce. When it comes to money, always assume greed will take hold at some point. Your spouse may try to hide assets to keep them from you.

One way that business owners sometimes do this is by overpaying on their taxes. This allows them to move money out of the family accounts in a way and look legitimate upon first inspection. After all, withdrawing money to give it to a friend leaves a suspicious paper trail. Paying taxes also leaves a paper trail, but it doesn’t look as concerning at a glance and that makes it appear legitimate.

But what happens when someone overpays their taxes by a substantial margin? The IRS sends them a refund check for the difference. They do get that money back and, if they time things right, they may not get it until after the divorce is over. Even if they get it before the divorce is over, they may try to set that check aside so that it doesn’t go back into any bank accounts that are part of the property division process. If you deserved some of that money, you do not get it.

You know that hiding assets is illegal and that the court requires full disclosure financially. That doesn’t mean it doesn’t happen. You need to know what options you have when it does.