What Family Law Attorneys Should Know About Using a CPA in Divorce Matters
By Steven DiVirgilio, CPA
I have spent my professional life looking at tax returns, business records, financial statements, payroll reports, bank activity, and general ledgers. In most ordinary business situations, those records tell a story. In divorce matters, they often tell only part of the story.
That is not always because someone is doing something wrong. Sometimes the records are incomplete. Sometimes the business owner does not fully understand his or her own accounting. Sometimes the tax return was prepared correctly for tax purposes but does not answer the question the Probate and Family Court needs answered. And sometimes, of course, a closer look shows that the financial picture being presented does not match the economic reality.
That is where a CPA can be useful to a family law attorney.
The goal is not to make the financial issues more complicated than they need to be. The goal is to make them clear. For family law attorneys, a CPA can help answer practical questions: What income is really available? What assets exist? Is the business paying personal expenses? Are distributions being made? Are profits being retained for legitimate business reasons? Is the tax return telling the whole story? What are the tax consequences of the proposed settlement?
In divorce matters involving a closely held business, self-employment income, partnership interests, S corporation income, professional practices, or inconsistent lifestyle and reported income, the CPA’s role can be especially important.
The CPA’s Role Is Broader Than “Doing the Math”
Many attorneys first think of a CPA when they need income calculated for child support or alimony. That is certainly one common role. But a CPA’s usefulness is broader than preparing a calculation.
A CPA may assist with income analysis, business valuation support, review of tax returns, tracing of assets, analysis of lifestyle and spending, identification of personal expenses paid through a business, review of shareholder loans and distributions, and analysis of tax consequences.
In Massachusetts, these issues matter because support and property division are fact-driven. Massachusetts General Laws Chapter 208, Section 53 provides that alimony determinations may consider factors such as the length of the marriage, the parties’ ages and health, income, employment, employability, economic and non-economic contributions, marital lifestyle, and the ability of each party to maintain that lifestyle.
Those are legal factors, but they often depend on financial evidence. A CPA helps counsel test whether the numbers being presented are complete, reliable, and consistent with the underlying records.
Closely Held Businesses Require Special Attention
Divorce cases involving closely held businesses are rarely as simple as looking at a W-2.
A business owner may have control over salary, distributions, expense classification, timing of income, family payroll, loans to or from the business, retained earnings, and payment of personal expenses through the company. That does not automatically mean anything improper occurred. But it does mean the financial analysis should not stop at taxable income.
A tax return may show modest income while the owner continues to receive substantial economic benefits. Those benefits may include company-paid vehicles, meals, travel, insurance, cell phones, rent, retirement contributions, expense reimbursements, or payments to family members.
The better question is not simply, “What did the tax return report?” The better question is, “What economic benefit was actually available to the spouse?”
Massachusetts child support guidance recognizes that income may include expense reimbursements, in-kind payments, personal use of business property, and payment of personal expenses by a business. That is exactly the type of issue a CPA can help identify and explain.
The Massachusetts Appeals Court’s decision in Caveney v. Caveney, 81 Mass. App. Ct. 102 (2012), is a good example. The husband’s base salary was approximately $100,000, but the judge found his true income to be approximately $200,000 because his companies paid personal expenses, including rent on his personal residence, mortgage payments on property he owned with his brothers, and other personal expenses.
That case reflects a very practical point: reported wages may not be the same as actual economic benefit. A CPA can review general ledgers, bank statements, credit card statements, payroll records, shareholder loan accounts, and expense categories to determine whether add-backs or adjustments may be appropriate.
Reported Income May Not Tell the Whole Story
One of the most important CPA functions in a divorce matter is testing whether reported income reflects reality.
In Dilanian v. Dilanian, 94 Mass. App. Ct. 505 (2018), the husband owned and controlled a business. The court affirmed findings that he had artificially lowered his income. The judge looked beyond reported salary and considered the broader financial picture, including retained business cash and other business-related benefits.
This is the type of fact pattern family law attorneys should watch for. If a business owner’s compensation drops after divorce proceedings begin, the question should be asked: did something actually change in the business, or did the owner change how money was being taken out?
A CPA can compare compensation history, business profitability, distributions, retained earnings, expense reimbursements, and year-end cash balances. That analysis can help counsel determine whether a decline in income is supported by the business records or whether further discovery is needed.
Tax Returns Are Evidence, Not Conclusions
Tax returns are useful. They are often the best starting point. But they are not always the ending point.
Tax returns are prepared for tax compliance purposes. They are not designed to answer every divorce-related financial question.
For example, depreciation may reduce taxable income without reducing current cash flow. A Schedule K-1 may report income that was never distributed. An S corporation owner may show low wages but receive distributions, reimbursements, or business-paid personal benefits. A partnership may allocate taxable income without distributing cash. A business may retain earnings for legitimate working capital needs, or it may retain earnings to reduce apparent income.
The Massachusetts Supreme Judicial Court addressed this type of issue in J.S. v. C.C., 454 Mass. 652 (2009). The case involved whether undistributed S corporation earnings should be included in income for child support. The court rejected a mechanical rule and required a case-specific inquiry.
That is exactly where a CPA can be useful. The CPA can help counsel analyze ownership percentage, control over distributions, prior distribution history, business cash needs, debt obligations, capital expenditure plans, tax distributions, and whether retained earnings are consistent with historical practice.
The point is not that all K-1 income should be included as support income. The point is also not that all undistributed business income should be ignored. The point is that the facts matter.
Business Valuation Is Not Just a Spreadsheet
When a marital estate includes a business interest, valuation may become necessary. This can include analysis of normalized earnings, reasonable owner compensation, tax structure, working capital, debt, discounts, goodwill, and the valuation date.
In real life, business valuation can be messy. Small businesses do not always have clean books. Owners may run personal expenses through the business. Family members may be on payroll. Related-party transactions may exist. The company may have assets on the books that are fully depreciated but still valuable. Or the company may have reported income that does not reflect the real economics of the business.
In Bernier v. Bernier, 449 Mass. 774 (2007), the Massachusetts Supreme Judicial Court addressed the valuation of S corporation supermarkets in a divorce context. The court held that the trial judge erred by adopting a valuation that tax-affected the S corporations as if they were C corporations, where one spouse would retain the shares and the other would be bought out. The court also rejected certain valuation discounts in that context.
For family law attorneys, Bernier is an important reminder that valuation depends on context. The entity’s tax status, who will own the business after divorce, whether there will be an actual sale, and whether discounts are appropriate all matter.
This is not just an academic issue. A valuation adjustment can materially change the marital estate.
Goodwill Can Be Difficult in Professional Practices
Goodwill is often one of the hardest concepts in divorce cases involving professional practices and service businesses.
Some goodwill may belong to the business itself. That may include location, staff, brand name, systems, customer relationships, referral sources, or recurring revenue. Other goodwill may be personal to the owner. That may include reputation, personal skill, personal relationships, or future earning capacity.
That distinction matters.
In Goldman v. Goldman, 28 Mass. App. Ct. 603 (1990), the Appeals Court upheld the trial judge’s decision not to assign goodwill value to the husband’s one-person professional corporation, where the judge accepted the accountant’s opinion that there was no goodwill in the professional corporation.
The practical lesson is that goodwill should not be assumed. A dental practice, medical practice, law practice, consulting business, accounting practice, or other professional service business may have enterprise value, personal goodwill, or some combination of both. The analysis depends on the facts.
A CPA can help counsel identify the facts that matter: whether the business could operate without the owner, whether employees generate revenue, whether there are recurring customer relationships, whether there are transferable systems, whether the owner has a noncompete, and whether a buyer would be purchasing a business or simply hoping the owner’s personal relationships continue.
Avoiding Double Counting
Another area where a CPA can help is avoiding double counting.
In divorce matters, the same stream of business earnings may be relevant to both business value and support. If the business is valued based on capitalized earnings, and then the same earnings are also used to calculate alimony or child support, counsel should understand whether the analysis is fair and internally consistent.
In Sampson v. Sampson, 62 Mass. App. Ct. 366 (2004), the Appeals Court discussed the relationship between property division and alimony and emphasized that they are interrelated remedies. The case is often discussed in connection with the risk of double counting in divorce matters involving business income and business value.
The practical issue is straightforward. If a business value is based on future earnings, and those same earnings are also treated as available income for support, counsel should ask careful questions. Was reasonable owner compensation deducted in the valuation? Were excess earnings capitalized? Is the income stream being counted once or twice? Does the valuation report explain the relationship between business value and support income?
A CPA can help review the expert report, identify the income stream being used, and explain whether the valuation and support analysis are consistent.
Discovery Should Be Built Around the Financial Questions
One of the best times to involve a CPA is before discovery is complete!
Too often, financial experts are brought in after documents have already been exchanged, mediation is approaching, and counsel is trying to make sense of incomplete records. Earlier involvement can make discovery more targeted and more useful.
For a business-owner spouse, relevant records may include personal and business tax returns, general ledgers, bank statements, credit card statements, payroll records, W-2s, 1099s, K-1s, shareholder loan ledgers, fixed asset schedules, depreciation schedules, loan applications, QuickBooks files, accounts receivable aging, accounts payable aging, retirement plan records, and documents supporting major expenses.
The cases above show why those records matter. In Caveney, business-paid personal expenses affected income. In Dilanian, retained cash and historical income patterns were relevant. In J.S. v. C.C., undistributed S corporation earnings required a fact-specific inquiry. In Bernier, entity structure and tax treatment affected valuation.
A CPA can help counsel ask better discovery questions: What records are missing? What documents should exist? What numbers do not reconcile? What expenses look personal? What distributions were made? What debt is real? What assets are on the books but not obvious from the tax return? What explanations need to be tested before mediation or trial?
Good financial work is often less about making the case more complicated and more about knowing where to look.
Tax Consequences Should Not Be an Afterthought
Divorce settlements can create tax consequences that materially affect the economics of a deal. A settlement that appears equal before tax may not be equal after tax.
Common tax issues include alimony, child-related credits, dependency claims, retirement account division, sale of the marital home, basis in appreciated assets, stock options, restricted stock, partnership interests, S corporation distributions, passive losses, installment sales, tax refunds, and tax liabilities.
For federal tax purposes, alimony under divorce or separation agreements executed after 2018 is generally not deductible by the payer and not taxable to the recipient.
Child support is also not deductible by the payer and not taxable to the recipient.
A CPA can help model after-tax results before settlement terms are finalized. That can be especially important where one spouse is receiving retirement assets, appreciated securities, business interests, real estate, or installment payments.
The CPA as Consultant, Expert, or Neutral
Family law attorneys should consider the CPA’s role at the beginning of the engagement.
The CPA may be retained as a consulting expert to help counsel understand records and develop discovery. The CPA may be retained as a testifying expert to prepare opinions for mediation, deposition, or trial. In some cases, the CPA may serve as a neutral financial professional.
The role matters. It affects communications, work product, reporting, expectations, and strategy.
Before engaging a CPA, counsel should be clear about the assignment. Is the CPA calculating income? Reviewing tax returns? Valuing a business? Tracing assets? Preparing for mediation? Reviewing the opposing expert’s report? Preparing testimony?
A narrow, well-defined scope usually produces a better and more cost-effective result.
A Practical CPA Perspective
In my own practice, I tend to look at divorce financial issues the same way I look at small business accounting issues generally: start with the records, follow the cash, reconcile the numbers, and do not assume the tax return tells the whole story.
That approach is not fancy. But it works.
Many closely held businesses are not run like public companies. The accounting may be informal. The owner may use the same credit card for business and personal expenses. The company may pay for vehicles, meals, insurance, rent, family payroll, or travel. There may be loans to shareholders, loans from shareholders, or related-party transactions that were never properly documented.
Sometimes those issues are innocent. Sometimes they are not. Either way, they need to be understood before counsel can fairly evaluate income, support, property division, or settlement.
A CPA can help bring order to that process.
Conclusion
A CPA can help family law attorneys convert financial records into usable evidence. The CPA’s role is not limited to preparing calculations at the end of a case. A CPA can help identify financial issues, shape discovery, analyze income and cash flow, review business records, evaluate tax consequences, and explain complex financial matters clearly.
Reported Massachusetts cases show why this matters. Courts have addressed artificially reduced income, business-paid personal expenses, undistributed S corporation earnings, goodwill, business valuation discounts, tax-affecting, and the risk of double counting. These are not abstract accounting issues. They are practical issues that can affect support, property division, settlement leverage, trial strategy, and the fairness of the final result.
The attorney remains the legal advocate. The CPA’s role is to provide financial clarity.
In divorce matters where the numbers matter — and they usually do — that clarity can be the difference between a settlement based on assumptions and a resolution based on evidence.
About the Author
Steven DiVirgilio, CPA, is a Massachusetts Certified Public Accountant based in the Greater Boston area. He advises individuals and closely held businesses on tax, accounting, financial reporting, and business matters. His litigation support practice includes analysis of tax returns, financial statements, business records, and closely held business issues that may arise in divorce and other legal matters. Steven is also an adjunct professor at Babson College.
This article is for general informational purposes only and does not constitute legal, tax, accounting, or valuation advice. Each matter depends on its specific facts and circumstances.
By Steven DiVirgilio, CPA
I have spent my professional life looking at tax returns, business records, financial statements, payroll reports, bank activity, and general ledgers. In most ordinary business situations, those records tell a story. In divorce matters, they often tell only part of the story.
That is not always because someone is doing something wrong. Sometimes the records are incomplete. Sometimes the business owner does not fully understand his or her own accounting. Sometimes the tax return was prepared correctly for tax purposes but does not answer the question the Probate and Family Court needs answered. And sometimes, of course, a closer look shows that the financial picture being presented does not match the economic reality.
That is where a CPA can be useful to a family law attorney.
The goal is not to make the financial issues more complicated than they need to be. The goal is to make them clear. For family law attorneys, a CPA can help answer practical questions: What income is really available? What assets exist? Is the business paying personal expenses? Are distributions being made? Are profits being retained for legitimate business reasons? Is the tax return telling the whole story? What are the tax consequences of the proposed settlement?
In divorce matters involving a closely held business, self-employment income, partnership interests, S corporation income, professional practices, or inconsistent lifestyle and reported income, the CPA’s role can be especially important.
The CPA’s Role Is Broader Than “Doing the Math”
Many attorneys first think of a CPA when they need income calculated for child support or alimony. That is certainly one common role. But a CPA’s usefulness is broader than preparing a calculation.
A CPA may assist with income analysis, business valuation support, review of tax returns, tracing of assets, analysis of lifestyle and spending, identification of personal expenses paid through a business, review of shareholder loans and distributions, and analysis of tax consequences.
In Massachusetts, these issues matter because support and property division are fact-driven. Massachusetts General Laws Chapter 208, Section 53 provides that alimony determinations may consider factors such as the length of the marriage, the parties’ ages and health, income, employment, employability, economic and non-economic contributions, marital lifestyle, and the ability of each party to maintain that lifestyle.
Those are legal factors, but they often depend on financial evidence. A CPA helps counsel test whether the numbers being presented are complete, reliable, and consistent with the underlying records.
Closely Held Businesses Require Special Attention
Divorce cases involving closely held businesses are rarely as simple as looking at a W-2.
A business owner may have control over salary, distributions, expense classification, timing of income, family payroll, loans to or from the business, retained earnings, and payment of personal expenses through the company. That does not automatically mean anything improper occurred. But it does mean the financial analysis should not stop at taxable income.
A tax return may show modest income while the owner continues to receive substantial economic benefits. Those benefits may include company-paid vehicles, meals, travel, insurance, cell phones, rent, retirement contributions, expense reimbursements, or payments to family members.
The better question is not simply, “What did the tax return report?” The better question is, “What economic benefit was actually available to the spouse?”
Massachusetts child support guidance recognizes that income may include expense reimbursements, in-kind payments, personal use of business property, and payment of personal expenses by a business. That is exactly the type of issue a CPA can help identify and explain.
The Massachusetts Appeals Court’s decision in Caveney v. Caveney, 81 Mass. App. Ct. 102 (2012), is a good example. The husband’s base salary was approximately $100,000, but the judge found his true income to be approximately $200,000 because his companies paid personal expenses, including rent on his personal residence, mortgage payments on property he owned with his brothers, and other personal expenses.
That case reflects a very practical point: reported wages may not be the same as actual economic benefit. A CPA can review general ledgers, bank statements, credit card statements, payroll records, shareholder loan accounts, and expense categories to determine whether add-backs or adjustments may be appropriate.
Reported Income May Not Tell the Whole Story
One of the most important CPA functions in a divorce matter is testing whether reported income reflects reality.
In Dilanian v. Dilanian, 94 Mass. App. Ct. 505 (2018), the husband owned and controlled a business. The court affirmed findings that he had artificially lowered his income. The judge looked beyond reported salary and considered the broader financial picture, including retained business cash and other business-related benefits.
This is the type of fact pattern family law attorneys should watch for. If a business owner’s compensation drops after divorce proceedings begin, the question should be asked: did something actually change in the business, or did the owner change how money was being taken out?
A CPA can compare compensation history, business profitability, distributions, retained earnings, expense reimbursements, and year-end cash balances. That analysis can help counsel determine whether a decline in income is supported by the business records or whether further discovery is needed.
Tax Returns Are Evidence, Not Conclusions
Tax returns are useful. They are often the best starting point. But they are not always the ending point.
Tax returns are prepared for tax compliance purposes. They are not designed to answer every divorce-related financial question.
For example, depreciation may reduce taxable income without reducing current cash flow. A Schedule K-1 may report income that was never distributed. An S corporation owner may show low wages but receive distributions, reimbursements, or business-paid personal benefits. A partnership may allocate taxable income without distributing cash. A business may retain earnings for legitimate working capital needs, or it may retain earnings to reduce apparent income.
The Massachusetts Supreme Judicial Court addressed this type of issue in J.S. v. C.C., 454 Mass. 652 (2009). The case involved whether undistributed S corporation earnings should be included in income for child support. The court rejected a mechanical rule and required a case-specific inquiry.
That is exactly where a CPA can be useful. The CPA can help counsel analyze ownership percentage, control over distributions, prior distribution history, business cash needs, debt obligations, capital expenditure plans, tax distributions, and whether retained earnings are consistent with historical practice.
The point is not that all K-1 income should be included as support income. The point is also not that all undistributed business income should be ignored. The point is that the facts matter.
Business Valuation Is Not Just a Spreadsheet
When a marital estate includes a business interest, valuation may become necessary. This can include analysis of normalized earnings, reasonable owner compensation, tax structure, working capital, debt, discounts, goodwill, and the valuation date.
In real life, business valuation can be messy. Small businesses do not always have clean books. Owners may run personal expenses through the business. Family members may be on payroll. Related-party transactions may exist. The company may have assets on the books that are fully depreciated but still valuable. Or the company may have reported income that does not reflect the real economics of the business.
In Bernier v. Bernier, 449 Mass. 774 (2007), the Massachusetts Supreme Judicial Court addressed the valuation of S corporation supermarkets in a divorce context. The court held that the trial judge erred by adopting a valuation that tax-affected the S corporations as if they were C corporations, where one spouse would retain the shares and the other would be bought out. The court also rejected certain valuation discounts in that context.
For family law attorneys, Bernier is an important reminder that valuation depends on context. The entity’s tax status, who will own the business after divorce, whether there will be an actual sale, and whether discounts are appropriate all matter.
This is not just an academic issue. A valuation adjustment can materially change the marital estate.
Goodwill Can Be Difficult in Professional Practices
Goodwill is often one of the hardest concepts in divorce cases involving professional practices and service businesses.
Some goodwill may belong to the business itself. That may include location, staff, brand name, systems, customer relationships, referral sources, or recurring revenue. Other goodwill may be personal to the owner. That may include reputation, personal skill, personal relationships, or future earning capacity.
That distinction matters.
In Goldman v. Goldman, 28 Mass. App. Ct. 603 (1990), the Appeals Court upheld the trial judge’s decision not to assign goodwill value to the husband’s one-person professional corporation, where the judge accepted the accountant’s opinion that there was no goodwill in the professional corporation.
The practical lesson is that goodwill should not be assumed. A dental practice, medical practice, law practice, consulting business, accounting practice, or other professional service business may have enterprise value, personal goodwill, or some combination of both. The analysis depends on the facts.
A CPA can help counsel identify the facts that matter: whether the business could operate without the owner, whether employees generate revenue, whether there are recurring customer relationships, whether there are transferable systems, whether the owner has a noncompete, and whether a buyer would be purchasing a business or simply hoping the owner’s personal relationships continue.
Avoiding Double Counting
Another area where a CPA can help is avoiding double counting.
In divorce matters, the same stream of business earnings may be relevant to both business value and support. If the business is valued based on capitalized earnings, and then the same earnings are also used to calculate alimony or child support, counsel should understand whether the analysis is fair and internally consistent.
In Sampson v. Sampson, 62 Mass. App. Ct. 366 (2004), the Appeals Court discussed the relationship between property division and alimony and emphasized that they are interrelated remedies. The case is often discussed in connection with the risk of double counting in divorce matters involving business income and business value.
The practical issue is straightforward. If a business value is based on future earnings, and those same earnings are also treated as available income for support, counsel should ask careful questions. Was reasonable owner compensation deducted in the valuation? Were excess earnings capitalized? Is the income stream being counted once or twice? Does the valuation report explain the relationship between business value and support income?
A CPA can help review the expert report, identify the income stream being used, and explain whether the valuation and support analysis are consistent.
Discovery Should Be Built Around the Financial Questions
One of the best times to involve a CPA is before discovery is complete!
Too often, financial experts are brought in after documents have already been exchanged, mediation is approaching, and counsel is trying to make sense of incomplete records. Earlier involvement can make discovery more targeted and more useful.
For a business-owner spouse, relevant records may include personal and business tax returns, general ledgers, bank statements, credit card statements, payroll records, W-2s, 1099s, K-1s, shareholder loan ledgers, fixed asset schedules, depreciation schedules, loan applications, QuickBooks files, accounts receivable aging, accounts payable aging, retirement plan records, and documents supporting major expenses.
The cases above show why those records matter. In Caveney, business-paid personal expenses affected income. In Dilanian, retained cash and historical income patterns were relevant. In J.S. v. C.C., undistributed S corporation earnings required a fact-specific inquiry. In Bernier, entity structure and tax treatment affected valuation.
A CPA can help counsel ask better discovery questions: What records are missing? What documents should exist? What numbers do not reconcile? What expenses look personal? What distributions were made? What debt is real? What assets are on the books but not obvious from the tax return? What explanations need to be tested before mediation or trial?
Good financial work is often less about making the case more complicated and more about knowing where to look.
Tax Consequences Should Not Be an Afterthought
Divorce settlements can create tax consequences that materially affect the economics of a deal. A settlement that appears equal before tax may not be equal after tax.
Common tax issues include alimony, child-related credits, dependency claims, retirement account division, sale of the marital home, basis in appreciated assets, stock options, restricted stock, partnership interests, S corporation distributions, passive losses, installment sales, tax refunds, and tax liabilities.
For federal tax purposes, alimony under divorce or separation agreements executed after 2018 is generally not deductible by the payer and not taxable to the recipient.
Child support is also not deductible by the payer and not taxable to the recipient.
A CPA can help model after-tax results before settlement terms are finalized. That can be especially important where one spouse is receiving retirement assets, appreciated securities, business interests, real estate, or installment payments.
The CPA as Consultant, Expert, or Neutral
Family law attorneys should consider the CPA’s role at the beginning of the engagement.
The CPA may be retained as a consulting expert to help counsel understand records and develop discovery. The CPA may be retained as a testifying expert to prepare opinions for mediation, deposition, or trial. In some cases, the CPA may serve as a neutral financial professional.
The role matters. It affects communications, work product, reporting, expectations, and strategy.
Before engaging a CPA, counsel should be clear about the assignment. Is the CPA calculating income? Reviewing tax returns? Valuing a business? Tracing assets? Preparing for mediation? Reviewing the opposing expert’s report? Preparing testimony?
A narrow, well-defined scope usually produces a better and more cost-effective result.
A Practical CPA Perspective
In my own practice, I tend to look at divorce financial issues the same way I look at small business accounting issues generally: start with the records, follow the cash, reconcile the numbers, and do not assume the tax return tells the whole story.
That approach is not fancy. But it works.
Many closely held businesses are not run like public companies. The accounting may be informal. The owner may use the same credit card for business and personal expenses. The company may pay for vehicles, meals, insurance, rent, family payroll, or travel. There may be loans to shareholders, loans from shareholders, or related-party transactions that were never properly documented.
Sometimes those issues are innocent. Sometimes they are not. Either way, they need to be understood before counsel can fairly evaluate income, support, property division, or settlement.
A CPA can help bring order to that process.
Conclusion
A CPA can help family law attorneys convert financial records into usable evidence. The CPA’s role is not limited to preparing calculations at the end of a case. A CPA can help identify financial issues, shape discovery, analyze income and cash flow, review business records, evaluate tax consequences, and explain complex financial matters clearly.
Reported Massachusetts cases show why this matters. Courts have addressed artificially reduced income, business-paid personal expenses, undistributed S corporation earnings, goodwill, business valuation discounts, tax-affecting, and the risk of double counting. These are not abstract accounting issues. They are practical issues that can affect support, property division, settlement leverage, trial strategy, and the fairness of the final result.
The attorney remains the legal advocate. The CPA’s role is to provide financial clarity.
In divorce matters where the numbers matter — and they usually do — that clarity can be the difference between a settlement based on assumptions and a resolution based on evidence.
About the Author
Steven DiVirgilio, CPA, is a Massachusetts Certified Public Accountant based in the Greater Boston area. He advises individuals and closely held businesses on tax, accounting, financial reporting, and business matters. His litigation support practice includes analysis of tax returns, financial statements, business records, and closely held business issues that may arise in divorce and other legal matters. Steven is also an adjunct professor at Babson College.
This article is for general informational purposes only and does not constitute legal, tax, accounting, or valuation advice. Each matter depends on its specific facts and circumstances.