Business owners engaged in fraudulent activities often try to
manipulate their companies’ financial statements. Fortunately for fraud
experts, business owners’ tax returns aren’t as easy to misrepresent. Certain
items on an owner’s Form 1040 can reveal hidden assets and income sources, particularly
lines reporting income from wages, tax-exempt interest income, retirement plan
distributions and refunds. Experts may also use information from Schedules A
through E to build legal cases against owners committing fraud or attempting to
divert marital assets.