Question: I know that my wife is hiding assets from me and the divorce court, but I can’t seem to get my lawyer motivated to prove it. He tells me that we can spend a lot of money hiring a certified public accountant, but that he does not see the need. First of all, how can I get my lawyer to take me seriously, and secondly, is there a less expensive way to gather the proof?

Answer: Generally, when assets are hidden in matrimonial matters, one of the following ways is used: (1) The owner spouse denies that the asset exists, thus requiring the other spouse to prove differently; (2) The owner spouse transfers the asset to a third person based on a claim of offset, requiring the other spouse to use discovery to of records of the third person; (3) The owner spouse claims that the asset was lost, spent, or dissipated; or (4) The owner spouse creates a false debt.

Since there are no shortcuts in trying to find hidden assets, your lawyer must use all forms of discovery available and be able to read and understand the basics of tax returns. But even though tax returns are the best starting point to find assets -- because income and expenses lead to assets, some lawyers are intimidated by these documents and do not spend enough time reviewing them.

Basically, when you look at tax returns, you will see that the first two pages are a "table of contents" on which all schedules and attachments to the return are listed and summarized. By starting here, you have a roadmap to the rest of the return and possibly to hidden assets.

Some of the important schedules and attachments include: (1) Schedule A on which taxpayers list itemized deductions; (2) Schedule B on which taxpayers list interest and dividend deductions; (3) Schedule C on which taxpayers report business or professional income; (4) Schedule D on which taxpayers report gains and losses from the sales of stocks, bonds and real estate; and (5) Schedule E which shows supplemental income and losses.

In addition, your returns may include Form 2119 (which covers the sale of a residence) and/or Form 2441 (which deals with child-care expenses). If there is a closely held corporation, you will want to review Form 1120 (the corporate return); and if one spouse is a partner in a business or other venture, you will want to review Form 1065 which is an information return that reports partnership activity that is passed on to the individual partners. And don’t forget about the Form 941 which is the return filed by the self-employed because there could be problems if withholding is not paid.

There are several possible attachments to the basic tax return which may provide important information. For these reasons, during the discovery process, you should secure and review both state and federal returns, along with all 1099’s, W-2’s, and K-1’s. But remember: While hidden assets can be used as a "smoking gun," if you cry wolf and don’t deliver the hidden asset, your case may be discredited.

In order to help lawyers understand how to use tax returns to gather information during the divorce process, The South Carolina Chapter of the American Academy of Matrimonial Lawyers has helped sponsor a video tape and accompanying book about how to read and understand tax returns. Featuring nationally recognized experts Steven Wagner, a certified Family Law Specialist, and David Schultz, a certified public accountant who specializes in forensic accounting, this four hour self-study program can help lawyers – and clients for that matter – get a good start. Available for only $79.95 including shipping and handling, this program will be available in mid-July 1999. To order, send check or money order to SCAAML Tax Program, P.O. Box 11704, Columbia, South Carolina, and we’ll make sure you receive the videos and book.

Jan Collins is an award-winning writer and editor. Jan Warner is a matrimonial, elder law, and tax attorney. Both are based in Columbia, South Carolina. Flying Solo is distributed nationally by Knight Ridder Tribune News Service.

Please send your questions by email to janwarner@flyingsolo.com or by mail to P.O.Box 11704, Columbia, S.C. 29211.