My wife and I defrauded the government by hiding income. Now we’re getting divorced, and she threatens to ruin us both

Dear Quentin,

This story will sound strange.

Throughout our marriage, my wife and I, on the advice of our accountant, defrauded the government by hiding income. We are independent. We have retirement accounts, but also bought properties and a second home and made as many cash payments as possible.

My wife – again, under the guidance of an accountant – continues to claim unemployment during the pandemic and only takes cash from her clients. We are now divorcing after she left me for her pandemic boyfriend. She was surprised in our vacation home with him.

I owe him some kind of spousal support because of our long marriage. But I believe it’s a lot less than she thinks it is, and now she wants to dig up all of our previous assets that are held in my name or on behalf of my other companies.

I’m saying she’s only entitled to our joint pension, our property and assets, and half of our joint business assets. It has an equal amount of assets in its own name. Not all of our children are at home, have completed college or high school, and / or are married.

Yes I know. It sounds ridiculous and yes I know we could both be in jail. I have not recommended anyone to dig, but she is adamant that she is getting more and curses the consequences of our two actions during the marriage to mutually defraud the government.

Future Jailbird

Dear FJ,

A couple who sleep together are less likely to stay together. The same, of course, is true of bandits. Your wife lied to Uncle Sam and now she lied to you. You are in good company. Of course you also lied to Uncle Sam. To quote the late Princess Diana in her infamous interview with Martin Bashir, “There were three of us in this marriage, so it was a bit crowded.”

You can try calling your wife’s bluff, sure, but that can get you both into hot water where the money eventually goes back to the Internal Revenue Service and you lose your properties, pay hefty. fines and face criminal charges. Good news for Uncle Sam; bad news for you and your wife. She seems to act consistently, which is about the nicest thing I can say about this whole mess.

High income tax evasion is on the increase. Unreported income as a fraction of real income rises from 7% in the poorest 50% of earners to more than 20% in the richest 1%, IRS researchers, Carnegie Mellon University, the London School of Economics and the University of California. , Berkeley concluded in an article released earlier this month.

Your wife seems to have you on a barrel. She knows you well enough to take this bet. The worst that can happen is if you say no. What your wife does next is guesswork. There is nothing she can do but keep this on you for months and years to come. This is not the kind of punishment the government could give you both (between a year and 20 years in New York).

You need an accountant (a new one), a lawyer and a mediator. You were the marital equivalent of Bonnie and Clyde, hiding income, buying property with cash, and doing it on the advice of an accountant. This piece of the puzzle is not lost on any of you. You have both signed your tax returns and you have to take the same responsibility for them.

Want to know more? Follow Quentin Fottrell on Twitterand read more of his columns here.

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