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Divorce and Claiming Cash Income for Purposes of Alimony and Support Calculations, The Implications

Mar 5, 2016 @ 01:02 PM — by Michael Green

If you or your spouse wishes to allege that the other has had a significant amount of income through cash that has not been claimed over the years, in a number of ways, it can affect the outcome of your divorce.  First, and most importantly, if you have both filed your income taxes jointly and have not claimed this income, you are both subject to potential issues with the court upon filing your divorce complaint.  There are what they generally call, "Sheridan" issues, meaning pursuant to certain case law, both parties may be liable with the IRS for unclaimed cash income regardless of which party earned the income, as both parties verified that their income taxes were correct upon filing. If you have not filed jointly, then one spouse may be able to claim they were an innocent spouse as regards to the unclaimed cash income.  If the parties choose to not settle their case and the issue of unclaimed cash income comes before the Court, the Court has a duty to report the parties to the IRS and then your divorce does not go through either.  Parties must be made aware of the law and the implications of their actions in such a case.  Alimony calculations and child support calculations for purposes of a settlement will have to be determined by the parties keeping in mind the law and how it may affect their case going forward.  Any claim of income from unclaimed cash by one party may require that a forensic accountant determine upon reviewing the lifestyle of the parties, a business and their expenditures what is likely the parties joint income for determining alimony and child support.

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