You are not in trouble at all. In fact, this helps you. The business account will show a loss, which should be subtracted from you other income. You can file a Schedule C for the business (if it was a sole proprietorship) and report the loss there too. You should. Then you can give them your tax return, showing a Schedule C loss. I am glad they subpoenaed your business records. Make sure sure you subtract the Schedule C loss from you other income on your divorce financial statement.
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