What Happens When a Spouse Doesn't Report All of Their Income at Divorce?

When a Spouse Doesn’t Report All of Their Income at Divorce

It’s common for spouse to hide assets such as income during a divorce and for obvious reasons.  They either feel they won’t have anything left after property is divided or they are upset and bitter at their spouse and feel they are not entitled to anything they have.  Hiding information may seem as if the spouse is being greedy but this could have serious consequences because it may affect how property is divided along with other important decisions.

Community property states may divide debt and assets equally but equitable distribution states may divide property and debt on fair terms; not always being equal.  Income is often an important factor in divorce because it may help determine who pays outstanding debt, alimony and child support.  This could become challenging especially if income tax information competed by both spouses says otherwise.

For a spouse claiming to make less income, they could be awarded more of the marital estate at the end of divorce.  Income is a factor when child support is determined which usually includes reviewing incomes of both spouses.  Inaccurate reporting may affect the amount that should be received.  The same is true for spousal support but this may also affect how your standard of living is viewed by the court.

Income tax returns may tell a more detailed story about hidden income along with how the couples standard of living is described during the proceedings. Depending on what state you reside in, consequences or penalties may be faced for hiding information that should be discussed with a divorce attorney.