Episode Description - Your Spouse Is Hiding Money. Here's How to Find It
Money has a way of exposing the secrets people work hardest to hide. In this conversation, certified divorce financial analyst Tammy Guns explains how financial manipulation, hidden assets, and business income games often show up long before a divorce is finalized. Drawing from her own divorce experience and years of courtroom testimony as an expert witness, Tammy shares how she helps uncover the financial stories buried inside bank records, business accounts, and spending patterns. If your spouse is hiding money in your divorce, Tammy can help you find it.
The discussion digs into the realities of divorce cases involving business owners, hidden income, and financial abuse. Tammy explains how personal expenses are often buried inside businesses, why a lifestyle analysis can reveal income that tax returns don’t show, and how judges rely on experts to translate complicated financial records into clear, understandable stories. She also breaks down how financial “strangulation” happens in divorce and why so many people enter the process without truly understanding their own finances.
What makes this conversation especially compelling is how practical and eye-opening it becomes. Tammy shares real-world examples involving hidden crypto, missing cash, suspicious spending, overseas assets, and even luxury lifestyles that don’t match reported income. But underneath all the courtroom drama is a bigger message: the more financially informed you are before and during divorce, the more power and peace of mind you’re likely to have when difficult decisions need to be made.
If the financial picture in your divorce isn’t adding up, this is a podcast episode you’re not going to want to miss.
Show Notes
About Tammy
Tammy Guns is a Certified Divorce Financial Analyst (CDFA®) who specializes in helping individuals navigate the financial complexities of divorce with clarity and confidence. She works closely with clients and legal professionals to analyze assets, income, and long-term financial outcomes, ensuring informed and equitable decisions. Tammy is committed to empowering her clients with the knowledge and strategies they need to secure a stable financial future beyond divorce.
Connect with Tammy
You can connect with Tammy on LinkedIn at Tammy Lynn Guns and on Facebook at Tammy Guns. You can follow Tammy on YouTube at @tammylynnguns9600 and on X at @GunsTammy. To learn more about how to work with Tammy, visit her website at Divorce Resource Center of Colorado.
Key Takeaways From This Episode with Tammy
- Tammy Guns is a certified divorce financial analyst and expert witness who uses her background in public accounting to help individuals navigate the complex financial landscapes of divorce.
- Tammy explains how her own personal journey through the court system twenty years ago revealed a significant lack of financial knowledge within the judiciary, inspiring her current career path.
- As an expert witness, Tammy frequently testifies in court to inform judges about intricate financial issues, such as income determination for business owners who may be hiding personal expenses.
- The discussion delves into "non-status quo spending," where one spouse might intentionally deplete marital funds through large purchases or personal luxuries just before a filing.
- Forensic accounting techniques are essential for separate property tracing, ensuring that assets owned before the marriage maintain their separate nature throughout the legal proceedings.
- Tammy highlights common tactics used by business owners to reduce reported income, including running family phone plans, personal travel, and even mistress-related expenses through company accounts.
- A critical takeaway is that a tax return is merely a starting point, as deep dives into general ledgers and source documents are often required to find the truth behind "lumped-in" office expenses.
- Financial abuse often takes the form of "financial strangulation," where one party is intentionally cut off from bank accounts and credit cards to force an unfavorable settlement.
- Beyond the courtroom, a comprehensive financial report serves as a powerful negotiation tool that often encourages the opposing side to settle early rather than face expert testimony.
- Understanding the true value of the "horses" in the marital estate empowers individuals to make informed decisions and secure a stable financial future with total peace of mind.
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Transcript
Your Spouse Is Hiding Money. Here's How to Find It
SPEAKERS
Karen Covy, Tammy Guns
Karen Covy 0:10
Hello, and welcome to Off the Fence, a podcast where we deconstruct difficult decision making so we can discover what keeps us stuck, and more importantly, how we can get unstuck and start making even tough decisions with confidence. I'm your host, Karen Covy, a former divorced lawyer, mediator, and arbitrator, turned coach, author, and entrepreneur. And now without further ado, let's get on with the show.
With me today, I have the pleasure of speaking with Tammy Guns. And Tammy is a certified divorce financial analyst who specializes in helping individuals navigate the financial complexities of divorce with clarity and confidence. She works closely with clients and legal professionals to analyze assets, income, and long-term financial outcomes, ensuring informed and equitable decisions. Tammy is committed to empowering her clients with the knowledge and strategies they need to secure a stable financial future beyond divorce. Tammy, welcome to the show.
Tammy Guns
Thank you for having me. I'm excited to talk with you today.
Karen Covy
And I'm excited to talk with you, and I'd like to start, if it's okay with you, with your story. What got you into this line of business?
Tammy Guns 1:28
Well, um, right out of college, I had an undergraduate degree in accounting and I worked at Arthur Anderson. So, I did um public accounting work and certainly finance and accounting has been part of my career um since the beginning. But what got me into certainly the divorce space was my own personal journey. Um, in that 20 years ago I went through a divorce. And so I was able to see into the court system and to see um some of the lack of knowledge and lack of finance within the courts. So it was my own personal journey that brought me to this.
Karen Covy 2:06
That makes sense. And, you know, one of the things that you do, and the reasons that the reasons that I wanted to talk with you that's different from other CDFAs is you actually testify in court. Am I right?
Tammy Guns 2:20
Correct. It is a great majority of my practice is going to court as an expert witness and helping to inform the court about financial issues within a case.
Karen Covy 2:30
So, tell me about that. Like what kind of cases would people want to bring in someone like you to testify in? And, you know, do you work with one party? Are you a neutral? How does this all work?
Tammy Guns 2:43
Oh, great question. So, I have been a neutral on cases, but it's far more common for me to work with one party. And typically um, I find clients, either clients find me themselves through my website, like they'll look for a forensic accountant or someone who can do this type of work, or I work with a lot of attorneys. I get a lot of referrals that way. So, what happens is, you know, there's people who could be perhaps married to someone who has their own business. And so then I help with income determination because as it turns out, a lot of business owners don't like to pay the IRS. So therefore, they will put a lot of personal expenses through the business, which I'm not here to report anyone to the IRS, but I do want to have appropriate income figures for the courts when determining child support and spousal support. So I will go through and help find out what the true income of the business is. Um, I will also do separate property tracing. So um again, it's really depends on state statute, what is considered marital, what is considered separate property. However, the burden of proof is always on the person who claims the separate property. So I will do a lot of that's kind of forensic accounting, doing some of the trade uh tracing to show that it kept its separate property nature. Um, I also do uh non-status quo spending. So again, I know this varies by state, but typically once you file for divorce, you're under what's considered an injunction for status quo, because every dollar that you spend could have been split by the parties. And so therefore, if someone is spending money that benefits themselves personally, I will help determine non-status quo spending. And that happens a lot. People are like, oh, I'm gonna keep spending a bunch of the marital funds. It's my last hurrah to be able to do so. And those are cases that I get hired on to help with. So, um I love what I do, and um, it's interesting work for sure, but those are the types of cases that I work on.
Karen Covy 4:46
Okay. So it does sound like it's interesting. Let's start with the last first, non-status quo spending. So somebody I've heard of cases, not that my clients would ever do this, but I've heard of cases um where one client they need a lot of medical procedures done, or they want cosmetic medical procedures done, and they try to do all of that at the end, you know, right before their divorce because they're gonna lose their health insurance. Or, you know, they have something that they've been saving up for, they want the car so that moving forward after the divorce, they don't have, you know, car troubles. What how does that play out in a divorce?
Tammy Guns 5:30
Oh, good question. So typically what I'm looking at is I will look about six months before someone files, and I will look at their average spending. And the way to do this is it's you don't want to do it in its entirety, you know, they spend X amount per month because that's not as um helpful, I believe. So what we do is we will take their credit card spending, their bank account spending, and we will categorize it for the, like I said, six months. Sometimes it's better to even do nine months before the divorce, and I'm sorry, before the filing. And then what we do is we'll categorize it into dining out or vacations or money spent on, you know, personal health, like you're saying. And so if there's a huge increase, we can see that someone was actually, you know, spending a lot of those marital funds. Now, I understand what you're saying. If someone's gonna lose their health insurance, it's best to go ahead and I mean, that's if you need a surgery, right? Your doctor already knows about that. Again, I'm not talking plastic surgery. I'm talking about if you need something to happen, right? So you're it's already well documented within your health care record. So that to me is an understandable expense. Um, however, when someone is taking money like and purchasing a new car, now again, you're reducing the liquidity of the family because you're taking perhaps cash out of a bank account and now you're turning it into a far like less liquid asset, such as, you know, like I said, as a car, plus it goes down in value. Those I'd have to know a little bit more about the circumstances. Did someone drive, were they driving a 20-year-old car that you know they're spending so much on maintenance? It made sense to get the new car. So, I would need more detail around that. Uh the story becomes very clear. I always say to a judge, I'll say, people lie, but documents don't. And so I let the documents be the source of truth. In fact, back when I was, you know, like I said, just graduating from college, we were always told, you know, these are source documents. Everything we looked at, we called them the source documents. It's a public accounting term. And so I say that all the time. These source documents don't lie. Um, at least now I know people can actually change these things. Now the technology has changed, but for the majority, you know, they don't lie. And those are the documents that we rely on in helping to paint a picture for the court.
Karen Covy 7:53
So, when you're looking at these documents, part of the problem that people have in divorce is they can't get the documents to look at. So, if somebody comes to you and they say, you know, I think my spouse is spending more than normal, more than status quo, but I don't have the documents. I don't have the credit card statements. They have control over all of that and they won't give it to me. What happens then?
Tammy Guns 8:23
Well, that's why attorneys are important on the case, because the attorneys can ask for that type of disclosure. And so I work very close with attorneys. They'll say to me, Tammy, what documents are you looking for? And here's the other thing, too, is that I always want to be cognizant of the financial cost of the work that I do. So, what I try to do with clients is I'll say, let's start with the most recent last year, right? Instead of going back five years, asking for five years of every credit card statement, every bank statement. So that that requires the attorney's time rate to ask for all of that disclosure. So, I'll say, let's start with a year and let's see if we see anything. If anything comes to look suspicious, then let's ask for another year or two prior to that. Trying to, like I said, save time because it the time that I'm spending on these documents, of course, is costing the client money. And I don't want that to be a waste of their money. Now, I will also say that clients have um hired me and I don't find an issue, and they don't look at it as an investment in what they paid me as wasted. They go, oh, that actually brings me peace of mind. So, there are cases when I find out, no, this income that they're reporting is correct, or no, the status quo spending has been maintained. They're like, okay, well, now I can go forth sleeping at night, knowing I didn't miss anything.
Karen Covy 9:45
I love that because my question is, at what point does it make sense to hire someone like you? Because in a divorce, trust goes out the window immediately, right? So, a lot of people think their spouse is hiding assets or not being forthright with information or blah, blah, blah, blah, you name it, right? That they're trying to put themselves in a better position to the detriment of the person of the client who's hiring you. How does somebody analyze their situation to say, is hiring someone like you worth it?
Tammy Guns 10:18
Well, that's a great question. It certainly is based on every individual case. And so I always will talk to clients first. So, I offer 20-minute complimentary consultations. I will talk to the client, I will get a very, you know, 40,000 view uh vantage point at their situation. And I'll say, it may make sense to hire me or it may not, right? Again, I went through a divorce myself and I know how expensive it is. And so I feel very honored to work in this space. And so I take that very seriously. So, I like to talk to my clients first to see if there is something we could move forward on. Um, and I also sometimes when I talk to them, I'm like, if you can gather some of these documents, here's some of the things you can look for. And if you start to notice things, again, please feel free to hire me at that point in time.
Karen Covy 11:10
That makes a lot of sense. And I know that one of the areas where people have the opportunity to hide money more than in other areas is when people own a business, when one of the spouses owns a business. So, talk to me about that. Where are places that you look to find hidden personal expenses in a business?
Tammy Guns 11:37
This is a huge topic. So, yes, business owners. That's probably a lot of the cases that I testify on, because you know, a business owner could say, I make $50,000 a year, right? So it some of them will have a W-2 and they'll say that's what I make. And then they won't include the draws, which we have to include the draws, right? Or what they'll do is um, you know, of course it's always the year that they're not making as much money, right? So what I do is I'll go in and I start, I go down to the lowest level of detail. So if they have a QuickBooks, I ask for their general ledger. Um, if I can look at how they're categorizing, because within a general ledger, it's an accounting system. You classify your expenses, and I can look at the detail and see if something stands out. I can tell you what I find. Client I'm recently worked on, they were paying their children's college expenses through the business. Again, that's it's not right, right? But that needs to get added back. Um, I had a client that was paying all of their therapy, and this was into the thousands of dollars through the business. Um, so again, those are personal expenses that need to be actually added back to the bottom line income. Um, the other thing we'll see a very common uh insurance paid on a vehicle or actually vehicle expense that isn't really used 100% for the business. So I'll look at that allocation. A lot of times they'll say it's oh, you know, my truck or whatever I use 100%, but they're also picking their kids up from school. So it's it's asking a lot of questions. So we'll add back a certain percentage that is the uh personal use. Um, phone usage. Oh, they put not only their own phone, but they'll put the entire family's phone through the business. So you you just look, oh, what else did I see? These are kind of annoying. I had a gentleman who was buying jewelry for his mistress uh through the business. So um, and then in his family didn't.
Karen Covy
How is that a business expense?
Tammy Guns
It's not right. And so you you can't this is the thing is a lot of judges don't understand a tax return. Okay. And again, this was shocking to me when I went through my own divorce. I just assumed they would have incredible knowledge base, they don't. So I actually do education for judicial officers, and I say, listen, a tax return is a starting point only. It is not an ending point because within the tax return, especially if they're, you know, have a Schedule C income, which is a personal business, or if they have a K1, like these are giving you office expenses. I need the detail behind the office expenses. They're giving you these lumped-in expenses, but that doesn't help me. I need to peel down all the way to the source level to understand where these expenses are going. I don't think I've looked at a single business where personal expenses are not being run through. I mean, universally that happens. There were also, um, unfortunately, during COVID, there were businesses that were running to the court or people running to the court asking to have their child support reduced because of the fact that, you know, they say their income was down due to COVID. However, yes, their income was down, but their expenses were down because they were receiving those SBA loans. So those SBA loans, they did not have to report as income. And in fact, it reduced their expenses because it paid for their payroll, their employees. So even though maybe their income could have gone from 200 down to 100, from a top-line perspective, their actual net profit increased because they weren't paying for their um employee expenses. Again, this was a one-off nuance, but who knows? We could have some other pandemic or something else hit. So there's things like that that the judges were not familiar with. And so if they if my clients would have had myself, someone like myself, testifying on their behalf, unfortunately it hurts the children, right? Because now the child support is reduced and reduced unfairly.
Karen Covy 15:44
So, how do you reconcile though, if the if some of the personal expenses that are being run through the business, like you mentioned college expenses? Somebody could say, I'm the business owner, yeah, I'm paying my kids college through my business, but if you put that income back in to what my actual income is, and you calculate child support or my contribution to child to college based on that, now I don't have enough money to actually do what I was already doing, which was paying the college expenses. So the kids are still gonna suffer. I mean, how do you reconcile those kinds of things? You know what I mean? You know what I'm saying?
Tammy Guns 16:28
I do, I know exactly what you're saying. So here's the thing. So I know this is gonna vary by states as well, right? My certification as a certified divorce financial analyst is a national certification. And I have to be familiar with I typically um testify in Colorado, but there's other states, you know, like I said, I can work in. So here in the state of Colorado, anything paid for children above the age of majority is not to be considered as far as reducing your income for child support purposes. Now I know that varies by state. And so what happens is you if you want to pay for college, that's great, but it shouldn't reduce what you would pay for the children that are still at home, right? To be able to cover their housing and their food and their and things like that. So it would, like I said, it would vary by state, but in Colorado, those get added back.
Karen Covy 17:22
So that I mean, that makes sense to me, but it seems to me that the once you do your work, you would generate a report, and then the person who is your client might have a decision to make or a mediation to do. It sounds like this would be way easier if you're negotiating using your work in a mediation than at court and say, how can we make this work? Does that would that be a better approach, you think?
Tammy Guns 17:48
Well, actually, that's always the best approach, right? Is to hire me early on in the case, if possible, so that we can put together the financial picture. I always say to people, listen, how can you horse trade if you don't know the value of the horses? How can you horse trade if some of the horses are out in the pasture and they really belong in the corral that we're trading? So you have to understand what is the actual overall value of the marital estate before you can start moving forward. I will tell you the majority of my cases settle. I mean, I do testify quite a bit, but I'll even get a call that morning from the attorney. Don't bother showing up at court. We settle them, you know, this morning. So my reports are helpful in settling cases because it's I put them together so that it's gonna have a strong um holding or standing within the courts. So because of that, it can a lot of times go, okay, I don't want to have the judge hear what Tammy has to say. Let's just settle. So it's very helpful.
Karen Covy 18:44
I love that. And I really hope that the people who are listening to it pay attention because what you just said is pure gold, right? So that your report, it's not just about being able to testify in court, but it's using your report as evidence that you can use to negotiate, to mediate, to settle your issues without ever having to go to court. That makes so much sense.
Tammy Guns 19:10
Yeah. And a lot of times what I find too is if I have a client who doesn't have as much financial acumen as their spouse, and the business owner's spouse just assumes that, oh, you know, I've been married to this person 20 or 30 years. They don't know anything. They're never gonna find out what's going on in my business. And so I become the voice of that client. And listen, I'm like, well, maybe my particular client doesn't have line of sight, but my report has line of sight. So here we go.
Karen Covy 19:38
Let's flip the conversation the other direction, if you can. Let's say that you're the spouse who is the small business owner and you see a divorce coming on your horizon. What can and should you do to prepare yourself for what's coming so that you and your business, which is your source of income too, can, you know, emerge from the end of the divorce as whole and healthy as possible?
Tammy Guns 20:06
You know what? That's a wonderful question. And I do get hired a lot by business owners as well, right? Who say, My spouse thinks I make more than I do. And so, um, in fact, I'm working on a case. When we're done with this podcast, I'll be working on it all day. Uh for that very reason is to show, you know, this is really what they do make. So sometimes the spouse thinks they're hiding things or thinks they make more than they do. And so um, again, you go through and you just make sure that you anything that would be considered personal in nature is not deducted from a business standpoint. And so um, again, I know people try to do that because they're trying to reduce their IRS obligation. Um, however, we want you to pay proper child support and spousal support. Um, so make sure your books are clean. Another thing that I find a lot, I mean, pretty much almost 100% of all cases, is commingling. Commingling, you know, the business credit card is used for personals, the personal credit card is used for business bank accounts. I see it's almost where it's this big mess of a picture where it's always best from even a liability standpoint, if you're a business owner, to keep your books clean. It really is, because you don't want anyone to pierce the veil of any kind of limited liability. And a way to keep your books clean is to not mix business and personal back and forth.
Karen Covy 21:30
That makes so much sense. And, you know, talking about businesses, if you could help explain the difference, what we've been talking about is business income and personal income being mixed together. What does that have to do, if anything, with the value of the business, right? Because in a divorce, a lot of people will want to know what the value of the business is. And the business owner typically has a lower impression of the value than the person. Who's not the business owner? So, do you get involved in those kinds of issues as well?
Tammy Guns 22:05
Yes. So normally a business valuation is done to determine what the value of that business is. Now, I don't do that type of work. I did years ago when I was at Arthur Anderson. I actually did valuations of businesses, so I know how they're done. That's basically a net present value of all future cash flows. So I can review those reports and look for what makes sense within them. There's some discussion too, whether something is professional goodwill or whether it's business goodwill. Because professional goodwill would be someone like, say, a doctor who's in a slow practice. They have a lot of goodwill in their practice, which is really related to them. They have people coming back. So to me, that seems unfair to if the person were to sell their business, they're not really selling professional goodwill. You only would want to count business goodwill, which is they have a good running practice, they already have people in place, things like that. So business valuations, I will also tell you what I find on client cases is if they know they're going through a divorce, they'll keep cash in the business. So usually businesses are not valued, like I said, they're valued on all future net income and brought back to today's dollars. So cash in a business is not valued as part of that business. Okay. So what I see is a lot of business owners will keep stash away cash. They won't take their distributions. Now it comes through on an income perspective, but you miss it on the assets. So when you do a marital balance sheet, there should be more money in the personal bank accounts versus the business bank accounts if they're not taking their draws. But like I said, you can find it. It won't, from an IRS perspective, they can't hide those draws. Those draws should are going to be reported. But I mean, I I've even found um accounts receivable where the business owner will lend money from the from the marital estate, right? Their own personal business account, or I'm sorry, their own personal accounts. They'll lend money to the business. It's considered an accounts receivable. So I always look on business books to see if there's an account or an account payable, it would be to the owner. So therefore, that's really a personal asset. So there's things that we can, I mean, that we look at on the business returns as well as the personal returns to see if there's things that really should be listed elsewhere.
Karen Covy 24:29
That makes so much sense. But let's switch from the small business aspect and just let's talk financial abuse. Um, because I know that's another area that you work in. What is financial abuse from you know an accounting perspective or your perspective?
Tammy Guns 24:49
Well, the cases that I work on where there tends to be financial abuse really has to do with almost like financial strangulation of a particular party, meaning like they won't the spouse doesn't have access to bank accounts or doesn't have access to credit cards, right? So that's part of the financial abuse that can go on. Um, and keeping the one person caught up in the court system and they don't have you know, and then they're like, Uncle, I just give and I want to settle because I don't have the money to keep going. So that's more like financial strangulation. But um gosh, there's all sorts of things for financial abuse. It could be personal or it could be within the business. Um, like I said, you could even classify mixing business and personal expenses as financial abuse. Um, I don't know if I completely answered what you were looking for in that question. Um, if you were looking more for the financial strangulation that can happen in a case.
Karen Covy 25:46
No, yeah, that's what I was thinking about because a lot of people they go into the divorce and they say, I know my spouse is, I mean, their motive is to bankrupt me, to bleed me dry, to, you know, and it's usually the spouse who doesn't have as big of an income or access to cash, um, who's getting strangled, as you say. So, what are some of the things, if that's happening to someone, what can they do about it? Or and how can they prepare for it on the front end?
Tammy Guns 26:23
So, preparation on the front end is important, right? So, once you a divorce is filed, you're under an injunction really not to be changing things. However, it's always best if you have a bank account. And I tell people this you should have your own bank account with your own ability to access funds. Um, you should have your own credit card so you have the ability so you can't be cut off. Um, or you know, I I've seen a lot of people who don't have their own credit cards and they're just an authorized user on their spouses. So, to have your line of sight, I mean, this is good for anyone, even if you're not going through a divorce. You should have access to funds. You should have access to a credit card. And it's funny, like I'll have clients who've been married 20 or 30 years, and they'll say, Tammy, I don't, I don't know what our light bill is. I don't know any of I don't know our budget. So I think it's oh it's really makes good sense, even if you're not the person who does the finances, to sit down either monthly or quarterly with your spouse and say, okay, tell me what's going on. Where are our investments? And so you can have this conversation, even if you are not getting into the granular level of understanding, but to have a financial conversation with your spouse so you understand what's going on, not like, well, I have no idea what's in the 401k, I have no idea in the investment account, I had no idea he invested in crypto. So um, I think it's best to sit down with your spouse and find out what's going on with your finances.
Karen Covy 27:50
You know, it's interesting that you mentioned crypto. I just had a conversation with a forensic cryptocurrency expert. And I asked him, it's like, how do people find the crypto? Because how do they even know to look? Because there's trails, there's digital trails, but you have to look for them, right? And he said, the number one way that people find crypto is that their spouse told them they had crypto way back in the day or they were going to buy it. And then the spouse who doesn't have it at least knows to look, right?
Tammy Guns 28:26
Correct. It's harder to find that because you don't get monthly statements. It's really a lot of those are held on phones, right? So, you're not even getting a monthly statement. Another thing I find is people buy silver and gold, and then all of a sudden it's missing. Um, or they have cash in a safe, and then all of a sudden that is missing. So um, yeah, there's lots, there's lots of ways that there's financial abuse or hiding of assets, unfortunately.
Karen Covy 28:54
Wow. Let's say somebody's in that position where they believe their spouse is hiding assets. Do you have like a checklist or some standard things that you say to people, get this information or look here or do this just to see if something is hidden?
Tammy Guns 29:13
Um, yes, I mean, there's ways, like I said, you can always start with bank accounts because if one of the things I look at is I say, what is the bank account where their check is being deposited from their work, from their employment, or draws from the business? Because that's where the source of income is coming in. Then I start looking at those bank accounts and I'll say, Oh, there's a transfer to this one, two, three, four account, but I don't see that they the spouse disclosed a one, two, three, four account with Wells Fargo or Bank of America. So we start again with those documents. I always want to, where does the money come in initially? And then I can start to see where the money goes out. Another way I'm going to work on a case. Um, I was just hired recently to look at what the household income has been for the last three years. And I can do this analysis by reducing federal taxes, reducing state taxes, reducing FICA taxes, finding out what should their disposable income be, and then look at their actual expenses and say, okay, they should have an extra X amount. Where did it go? Is it invested? Maybe that's why it got invested in crypto. Because, you know, what happened to the extra 50,000? Where did it go? We can't, we can't explain. So, it's there's a way and a process to go about it. Um, and like I said, even though Arthur Anderson, you know, I tell people we had that whole Enron scandal, it taught me a lot about being able to do the work that I do today.
Karen Covy 30:39
Yeah, that's so important. But what happens when you've got the opposite, right? So the spouse brings home $50,000 a year in income, and that's their W-2, and that's what all the records, financial records show. But they have a Porsche, they go on expensive vacations, they have a huge mortgage and a big house and maybe a vacation home. So clearly the income doesn't match the lifestyle. How do you what happens then?
Tammy Guns 31:13
Okay, that's another way that we do cases. And you use the exact word, it's lifestyle, right? So it's saying, okay, it's not passing the squeeze test, it's not passing the sniff test. How can you only make $50,000 that you report to the IRS, yet you have paid off luxury vehicles or paid off vacation homes? That says this does not make sense. There's got to be another source of income, you know, that they're not reporting to the courts. So the income must be much higher. I mean, the very first case I ever testified in court, um, the business owner said he made $50,000 a year, and I told the judge he made $450,000 a year. And she used my number for calculation of support.
Karen Covy 31:59
Wow. That's amazing. You know, tell me, because you have a lot a lot of experience testifying in court. How open are judges to hearing what you have to say and understanding, you know, the points that you make? Because judges, to your point, to kind of come full circle, they're not specifically trained in accounting.
Tammy Guns 32:21
My own personal experience, I found they're very open. They want to know. Um, so I get, of course, direct um questions right from my own clients, counsel and attorney. And then, of course, I get crossed by the opposing. And then, of course, that'll redirect. But then a judge will literally turn to me and I'll turn and look right at the judge. Tammy, I have some questions for you. So can you tell me if the client is reporting expenses on this financial statements? But is he double counting? Because if it's already reported on the business, they'll ask me questions, they'll ask me to open up a tax return, explain things to them. I have found the majority of judges to be incredibly receptive because they want to do a good job, right? Everybody wants to do a good job. And I find them to be the judicial officers to have high honor. So I get a lot of times more questions from the judge than the attorneys.
Karen Covy 33:22
Wow. That's amazing. So it seems to me that's another reason why if somebody gets a report from you that says that their spouse is hiding income or hiding assets, that that spouse would be wise to enter into negotiations and stay out of court because the judge is probably gonna listen to you.
Tammy Guns 33:46
Yeah, they do. And I actually like being questioned by the judge. It doesn't count against either side's time in court, but the reason why I like it, because I really I view myself as an educator. When I'm there, I have to make my reports very understandable. I know that that it's you can't talk high-level accounting and finance because it's just gonna go over everybody's head. You take this complex financial information and you put it into a story that is very understandable. The more you can simplify it, the better. And it the better that you can do that, the more that the judge is gonna use your report in their final determination. So I think it's not only a skill set to have financial acumen, but to be able to take that financial acumen and put it into a story that is very relatable to a judge.
Karen Covy 34:36
I love that. And okay, speaking of stories, I just have to ask, and I know this is totally a not fair question, and you can change names and whatever, but what's the craziest story you have ever come across?
Tammy Guns 34:48
Um, you mean for the client stories?
Karen Covy 34:50
Yeah, yeah. For the for the people that hire you or things that that you've seen that you've just that have really been crazy and mind-blowing.
Tammy Guns 34:59
Um, I there's a lot of them also choosing one with the hack. But I see a lot where people come from wealthy families and then they choose not to work or they don't work as much within their business, and then they'll claim that they can't pay child support, but yet they live in a four million dollar home that the business does, you know, the business pays for um because they it's a business expense and it's not. Or um, I had a client that had a lot of foreign assets um overseas. So that can be interesting to try to prove that kind of stuff. Um, like I said, it's interesting when you learn, I can tell who someone is without ever meeting them. I look at their bank statements and their credit cards, and I can tell whether this person has a drinking problem. I can tell whether they have a gambling problem. Um, people who are into unfortunate things like porn, it it's all shows up. So I learn a lot about a person's personality without ever talking to them. If their statements tell me a lot about who they are.
Karen Covy 36:03
That's fascinating. That is so interesting. I love that. I did and thank you for sharing that. Thank you for sharing everything that you've shared. This has been so helpful. If people are interested in working with you or if they want to learn more about you, where can they find you? Where's the best place?
Tammy Guns 36:21
Sure. Well, so I'm the owner of the Divorce Resource Center of Colorado. Our website, you can Google it that way, or it's DRCofcolorado.com. It stands for the Divorce Resource Center of Colorado.com. And then my direct business line is 303-301-4231. And so they can get a hold of me that way as well. And then my email is Tammy at D R C of Colorado.com. And how do you how do they spell Tammy? Oh, great question. Yes, it's T-A-M-M-Y. Yes.
Karen Covy 37:01
That's that is awesome. Tammy, this has been so helpful and such a great conversation. Thank you so much.
Tammy Guns 37:08
Well, I've enjoyed talking to you, and I really appreciate being able to be on your show.
Karen Covy 37:13
Okay, so for those of you who are listening or watching to this show, if you've appreciated today's conversation, if you'd like to hear more conversations just like it, do me a big favor. Give this episode a thumbs up, like, subscribe to the podcast, subscribe to the YouTube channel, and I look forward to seeing you all again next time.
