Most people would blanch at the idea of voluntarily overpaying the Internal Revenue Service more than half a million dollars.
A retired accountant chose to write those huge checks to the taxman in a bid to hide money from his soon-to-be ex-wife, according to Peggy L. Tracy, a certified financial planner and owner of Priority Planning in Wheaton, Illinois.
The wife — who was Tracy’s client — knew something was up when her husband didn’t file their tax returns for two years.
The planner asked the IRS for a history of tax payments and turned up a surprise.
“His tax bill every year was about $40,000, but we found out he was putting away hundreds of thousands in estimated payment vouchers and just leaving the money there,” Tracy said.
“He was parking the money with the IRS.”
In all, the retired CPA made more than $500,000 in extra tax payments, pulling the money from a brokerage account.
“His theory was that when he got divorced, he’d be single, he’d file his back taxes and get the money out,” said Tracy. “We caught him and did the back tax returns, so it was about $200,000 in tax refunds for both.”
When it comes to uncovering a spouse’s hidden assets and income, your tax return just might be the key to chasing down that cash and getting an equitable split in a divorce…..Read more>>