Inaccurate Representation of Income

[GottaGo]

What is the name of your state? NJ

STB ex is self-employed. Last year he brought in over 100K (I did his books), but yet he told me that when he did his taxes, his post-expense income was about 25K (we split in January, filed separately). How he got about 100K in expenses is beyond me.
This does concern me though when it comes to child support. I have not yet gone to court to pursue it. I have been trying to handle things between us in a civil manner wherever possible. He has arbitrarily given me money (about $400 total), but because of the random schedule and amounts I think it may be necessary for me to actually file and pursue it legally.

Anyway, if he and his accountant can drum up 100K in expenses, it really concerns me that his representations of his income in court will be greatly inaccurate. He says ‘his business’ brought in over 100K, but ‘he’ only made about 26K. Will the courts buy this one when it is a sole-proprietorship with no employees?

Also, does anyone know how much of his ‘expenses’ will be taken into account? For instance, he has 3 trucks for work he is still paying on (although he personally only pays for 1 of them, the other 2 are paid by someone else!), and a car that he is leasing for personal use, as well as a brand new SUV for personal use (‘for his kids’) that he traded one of his work trucks in to buy – so not sure if that one is in the business name or his name. He also has about 3 sub-contractors he pays, and the occasional tool to purchase.
We all know people can get very creative when it comes to taxes. How can I prepare myself (with financial information) so that my kids will get the support they deserve?

I am also self-employed, minimal expenses, about 26K income last year. I have a 12 y/o from a previous relationship, and me and my stb ex have a 3 ½ yr old and an 8 month old. We have joint legal custody and I am the physical custodian. He has visitation every other weekend, Wednesday eve and every other Tuesday overnight (which they usually don’t stay overnight b/c my stb ex has to work in the morning).

Thanks for your help.

 

[Ohiogal]

What does he do?

 

[GottaGo]

Low voltage wiring installations. (Phone, Cable, CCTV, Alarm)

 

[LdiJ]

What is the name of your state? NJ

STB ex is self-employed. Last year he brought in over 100K (I did his books), but yet he told me that when he did his taxes, his post-expense income was about 25K (we split in January, filed separately). How he got about 100K in expenses is beyond me.
This does concern me though when it comes to child support. I have not yet gone to court to pursue it. I have been trying to handle things between us in a civil manner wherever possible. He has arbitrarily given me money (about $400 total), but because of the random schedule and amounts I think it may be necessary for me to actually file and pursue it legally.

Anyway, if he and his accountant can drum up 100K in expenses, it really concerns me that his representations of his income in court will be greatly inaccurate. He says ‘his business’ brought in over 100K, but ‘he’ only made about 26K. Will the courts buy this one when it is a sole-proprietorship with no employees?

Also, does anyone know how much of his ‘expenses’ will be taken into account? For instance, he has 3 trucks for work he is still paying on (although he personally only pays for 1 of them, the other 2 are paid by someone else!), and a car that he is leasing for personal use, as well as a brand new SUV for personal use (‘for his kids’) that he traded one of his work trucks in to buy – so not sure if that one is in the business name or his name. He also has about 3 sub-contractors he pays, and the occasional tool to purchase.
We all know people can get very creative when it comes to taxes. How can I prepare myself (with financial information) so that my kids will get the support they deserve?

I am also self-employed, minimal expenses, about 26K income last year. I have a 12 y/o from a previous relationship, and me and my stb ex have a 3 ½ yr old and an 8 month old. We have joint legal custody and I am the physical custodian. He has visitation every other weekend, Wednesday eve and every other Tuesday overnight (which they usually don’t stay overnight b/c my stb ex has to work in the morning).

Thanks for your help.

Income from self employment is the profit that the business makes. Someone having over 100k in gross proceeds but only 26k in profit is not outlandish. However, that also doesn't mean that there was no "book cooking" going on either.

You could have his books subpeonaed and audited by a forensic accountant, but that might be more expensive than the situation merits.

 

[GottaGo]

Is there anything that I can do to help expose the truth? I do not have a lawyer, nor do I have money to hire one. I just want to be as prepared as possible so my children can be properly supported by us both.

 

[Sandwalk]

Hello Gottago.....I am in the same exact situation as you are. It is very hard to come up with the information that you need to get a fair amount of CS that your kids deserve when your ex cheats on the books. If you find out any way please let me know because I am going through the same thing.

 

[Zephyr]

did he cook the books when you were with him?

 

[nextwife]

Materials (tools, cables, wires, clamps, etc.)? GAS? Other vehicle expenses? Marketing? Insurance when on site. Insurance for business use auto. Disability, key man insurance. Trade organization costs (Builder's Association, NARI, etc.) Technical update education costs - trade literature, classes, etc. Licensing.

 

[Sandwalk]

Yes that is all true....but, don't forget all the "cash" dealings that go on also. If these NCP want to do this sort of thing at least don't try to cheat your kids too. People with non-self-employed jobs pay all their taxes and so should they!

 

[jbowman]

I am in the same situation. The NCP is an independent contractor. His 1099 said he made 88K one year and 90K the next (or something close). After business expenses, he claimed to make about $700 per month. The judge in my case said that it made absolutely NO SENSE, that he was making LESS than minimum wage and he needed to come back with exact proof of all his expenses. She also said that if this was, in fact, true, then he was not working to his full capability and she would impute an income based on what he was capable of earning. We had a continuance for him to get his records in order.

He came back to court a bit more forthcoming. I still dont believe it was the absolute truth of his total income but it was better. Judges DO use common sense. The only thing is, YOU have to bring it to their attention. If you don't object to it, the judge will think you agree with it. I HAD to specifically say "Your honor, I do not agree with the income he is claiming..." etc. THEN she looked into it more closely.