Father's Attempt To Conceal Income With Improper Deductions Fails

A father who owned his business and who artificially reduced his salary even as the business had greater income and declared deductions for expensive travel and other personal expenses was held accountable to pay the proper amount of child support. The couple had divorced years before and had an agreement that required recalculation of child support based upon his income.

In a recent case, the father in 2008 reported that his business grossed $147,000 and that his salary was $86,000 however to avoid paying more in child support he reduced his salary even though the business made more money. In 2010 the business grossed $188,848 however he reported his salary was only $28,600. In 2011 the business grossed $203,722 but his reported salary was only $40,740 and in 2012 the gross was $287,556 with alleged salary of only $43,400.

The father was found to have his business paying large sums for his personal expenses which included his legal fees for the case and his trip to Israel that coincided with his son's Bar Mitzvah which he claimed was necessary to meet with representatives of an Israeli clothing company. The most outrageous expense deduction was for his three week trip to climb Mount Everest because he was "working on marketing for a company that sold mountaineering gear".

The court found that the father controlled all business decisions and spending of the company and solely determined his compensation. The father also solely approved his unsupported "business" expenses while paying himself less as the company became more successful. All of this led to a decision that he owed the mother substantial sums for back child support which he had failed to pay based upon his claim that his earnings were so low.

I am reminded of a comment from a law school professor who said if you try to claim your dog as a dependent you shouldn't complain if the IRS doesn't believe it. Here the father became so greedy in his desire to pay as little as possible that he lost all credibility with the judge and therefore had to pay what he owed.

Child support is critical for parents to be able to support their children. Abuses in the calculation or payment of child support need to be prevented. If you find yourself in need of strong representation to protect your rights to receive child support, please call my office to meet me and learn how I can help you.