Couples in Illinois who are going through a high-asset divorce have a lot to consider. Each side needs to dig a little deeper sometimes to uncover assets the other one may be hiding. One way some wealthy individuals attempt to keep money from their spouses is through an offshore account. While keeping money in a different country is not illegal, keeping it secret and not paying taxes on the income earned definitely is illegal. Knowing how to find out if your partner has an offshore account has become easier thanks to new tax laws.
According to the American Bar Association, the U.S. government has been working harder to combat tax fraud and evasion by taking a close look at offshore accounts. In one example, a banker in Panama worked with the government to convict a wealthy plastic surgeon of hiding millions of dollars from the wife he was divorcing. Thanks to the Foreign Account Tax Compliance Act in 2013, there is an increase in transparency which makes it easier to find out if a spouse has assets elsewhere.
The IRS admits to benefits, such as investments and convenience, of keeping money in offshore accounts but it does require taxpayers to report this money and any earned income. Because of this, if a spouse is abiding the law, this information can easily be found on his or her tax return. Offshore money can be found on Form 8938, which is the Statement of Foreign Financial Assets. During the discovery process, spouses should also ask for Form 114, Report of Foreign Bank and Financial Accounts, as this also discloses foreign assets but is not filed with the regular tax return.