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Dividing an Atlanta business in divorce: tax returns

If you and your spouse jointly own or both have an interest in a Georgia small or family-owned business, that entity will likely be a significant factor in your divorce negotiations and decree. As such, it is important that the family court judge presiding over your divorce and property division has the business’ income tax returns and any other important financial documents. But what happens if your spouse refuses to turn over the necessary information?

Often, spouses who refuse to produce business income tax returns will give one of a few common reasons that he or she is unable to do so. “I don’t have them,” “I need the board’s approval before I can release them,” or “They contain private information that I don’t have permission to disclose,” he or she might say. However, none of those excuses is factual, and we will discuss why below.

Under the Internal Revenue Code, any person who has a 1 percent or greater interest in a business must have access to the business’ income tax returns. As such, owners can get a copy of those documents at any time and for any reason and without permission or approval from board members or shareholders.

Even though the law is on your side, your spouse may still resist your efforts or outright prevent you from getting access to the tax returns. If you are in that situation, you may need to seek a court order that compels your spouse to obtain and produce the returns and other financial documents.

Source: Fraud Files, “Getting Business Tax Returns in a Divorce,” Nov. 9, 2012