During a high-asset divorce, financial disclosure statements are looked at closely. Occasionally an in-depth investigation into the financial practices of one spouse can raise concerns for the other spouse. After all, fraudulent or erroneous tax practices can result in serious fines, penalties or even jail time. If you are facing adverse legal consequences during divorce due to your spouse’s questionable financial practices, you may be able to request innocent spouse relief.
The discovery process in high asset divorce cases is used to uncover hidden assets and assign a specific valuation to questionable assets. Sometimes this process actually uncovers quite a bit more than what spouses are ready to handle. Questionable financial practices like tax fraud can lead to undesirable legal attention and may have both spouses facing serious consequences. In the event any type of fraudulent financial practices are found during the discovery process of divorce, the innocent spouse may be able to gain the protection of innocent spouse relief.
This type of protection is offered to individuals whose soon-to-be ex-spouse is assumed to have engaged in it illegal or fraudulent financial practices. Although there are several requirements and conditions that apply to spouses seeking innocent spouse relief, the IRS allows this protection to relieve the unknowing spouse from any obligations, penalties and fines associated with their spouse’s illegal activity.
High asset divorces are extremely complex and have been known to uncover illegal financial activity in certain cases. For divorcing spouses concerned that their soon-to-be ex’s financial practices may have them on the hook for IRS repercussions, it may be best to work with an experienced divorce attorney. With their help, innocent spouses can apply for the protection offered by the IRS in the form of innocent spouse relief.