Is it worth it to hide income?
Hiding income to shirk child support or alimony obligations, or to receive a better property distribution settlement is not advisable. While your business offers a great vehicle to conceal income or assets, the consequences usually outweigh any benefit.
First, it is easy to get caught. Throughout the course of your divorce proceedings you will likely have attorneys and experts who are trained in finding hidden assets pouring through your financials. Chances are you’ll get caught.
At a minimum, concealing assets in a divorce proceeding can result in sanctions, including attorney’s fees for your former spouse. Also, a judge can hold you in contempt if you fail to abide by an order requesting that you disclose information and you fail to do so.
On a larger scale, if your hidden income or assets are not reflected on your tax returns you could face even more severe penalties. Tax fraud is a federal crime with serious consequences. Anyone can report potential fraud to the IRS simply by filling out IRS form 3949-A. If the IRS investigates and discovers fraud you could face massive fines or even jail time. So, while it may seem smart to under-report your income to avoid support obligations, it most likely is not worth the penalties you would incur should you be reported to the IRS and found guilty of tax fraud.
Hiding income to shirk child support or alimony obligations, or to receive a better property distribution settlement is not advisable. While your business offers a great vehicle to conceal income or assets, the consequences usually outweigh any benefit.
First, it is easy to get caught. Throughout the course of your divorce proceedings you will likely have attorneys and experts who are trained in finding hidden assets pouring through your financials. Chances are you’ll get caught.
At a minimum, concealing assets in a divorce proceeding can result in sanctions, including attorney’s fees for your former spouse. Also, a judge can hold you in contempt if you fail to abide by an order requesting that you disclose information and you fail to do so.
On a larger scale, if your hidden income or assets are not reflected on your tax returns you could face even more severe penalties. Tax fraud is a federal crime with serious consequences. Anyone can report potential fraud to the IRS simply by filling out IRS form 3949-A. If the IRS investigates and discovers fraud you could face massive fines or even jail time. So, while it may seem smart to under-report your income to avoid support obligations, it most likely is not worth the penalties you would incur should you be reported to the IRS and found guilty of tax fraud.
