| Copyright (c) 2009 Ron Lasorsa | | | | creates a slanted view of income because the goal |
| The court views child support as the child's right to | | | | of self-employed tax returns is to pay as little as |
| receive financial help from their parent. And quite | | | | possible to the franchise tax board and the IRS. |
| honestly, a parent should want to support their child | | | | What might be an annual income of $75,000.00 now |
| to the best of their ability. However, there are | | | | looks like $35,000.00 which, when plugged into the |
| situations on each end of the spectrum where the | | | | child support software, yields a MUCH DIFFERENT |
| results are inequitable. For example, a parent may be | | | | RESULT. The under-the-table individuals, they may |
| working extra hours, over-time and doing everything | | | | not be claiming the income at all. Since there are no |
| in their power to make money because they want | | | | tax returns or pay stubs, that party can represent |
| to stay current on their child support, yet still have | | | | income that is difficult to disprove (without a private |
| enough to live. Often, the child support (which can be | | | | detective following them around taking pictures of |
| up to 40% of one's net disposable income) makes it | | | | cash!!). Clearly, when a party can say that there |
| difficult or impossible for the parent to afford their | | | | income is just about anything, child support will be |
| own household. Or you might have a parent who | | | | distorted. |
| does not represent their income correctly in which | | | | Arrearages |
| case a child suffers when the parent actually has the | | | | A party is ordered to pay a certain amount of |
| resources to help. Child support can be excessive or | | | | money. If they get behind, that amount is called |
| off-center when: (1) You have an unreasonable | | | | "arrears." So, let's assume that Mother owes $500.00 |
| ex-spouse who continuously takes the other parent | | | | per month and she is behind (4) months or $2000.00. |
| to court; (2) Ex-spouse lies about their income | | | | Father takes her to court to pay the back arrears. |
| creating a skewed view of the respective parties | | | | Some courts will assess interest on the arrears as |
| resources; (3) Under-the table and self-employment | | | | high as 10%. That would make the arrearages |
| earnings; (4) Arrearages; and (5) New family | | | | actually $2200.00. The mother needs to start paying |
| expenses. Let's go over each scenario in detail... | | | | this back to avoid getting too far behind. Additionally, |
| Unreasonable Ex-Spouse Taking Other Parent to | | | | the court does not want to spread it out over too |
| Court | | | | long a period of time. Let's assume the court orders |
| In this situation, you have an ex who wants to go to | | | | mother to pay back arrearages at the rate of |
| court every time they can. The problem with child | | | | $220.00 per month for the next (10) months. |
| support is that ever time there is a change in income | | | | Therefore, instead of paying $500.00 per month - |
| +/- in either household, that party can file a motion | | | | she now pays $720.00 per month plus any "additional" |
| and go back to court. So, let's assume father gets a | | | | support such as day care, health premiums, etc. |
| raise or a bonus and mother discovers this, mother is | | | | which are completely permissible |
| entitled to take the father back to court. Ignoring | | | | court—ordered add-ons. This results in mother |
| the expense of attorneys to defend against the | | | | now paying a greater percentage of her net |
| motion (ranging from $150.00 to $750.00, for | | | | disposable income to support, yet we must think of |
| example, the father may now experience an increase | | | | father. For (4) months, he supported the child 100% |
| in his support as a result of his good work and | | | | without any aid from mother. So, there is a valid |
| efforts at his employment. Many responsible parents | | | | argument for each parent as you can see. |
| who support their children well view this as a form of | | | | New family expenses |
| punishment, i.e. the result of getting a work bonus or | | | | These expenses are perhaps the most difficult to |
| raise is being hit harder with support. It is certainly a | | | | work with . What occurs here is that one or both |
| DIS-INCENTIVE if ever I have seen one. Why work | | | | parties have moved-on, remarried and had more |
| so hard if you are just going to have to pay more in | | | | children. That new family creates additional expenses |
| support? | | | | to the family which then pull from the supported child. |
| Ex-Spouse Lies about their Income Creating a | | | | Most courts call these new expenses hardship |
| Skewed View of Resources | | | | deductions. For example, father re-marries and his |
| Child support is determined based upon a number of | | | | new wife has twins. Now, the father is supporting his |
| factors, one of which is the parties resources. The | | | | (3) children from his first marriage, but he also has a |
| courts will insert each parties income into a computer | | | | new family that require his support as well. Let's |
| program and out spits an amount of support. If one | | | | assume his new wife earns no income and stays at |
| spouse lies about their income, the support amount | | | | home carrying for the new babies which is often the |
| will be off. Here's how it works if either spouse lies - | | | | case. If the Dad was paying $1000.00 per month for |
| If the parent RECEIVING support lies, they will | | | | his three children - and only makes $4000.00 per |
| receive more support than they are entitled to | | | | month, this leaves $3000.00 to care for a family of |
| because they have represented that they make | | | | (4) which may be difficult. The court will apply a |
| LESS money. Not only do they have difference | | | | hardship deduction for the twins which, believe it or |
| between their actual income and what they stated | | | | not, reduces the support paid to the (3) children from |
| but they also have increased support. If the parent | | | | this first marriage. So now, the supported parent |
| PAYING support lies, they will pay less support when | | | | receives $700.00 because Dad decided to have more |
| in fact they have more net disposable income which | | | | children. While the result seems very unfair to the |
| could have gone to their child. This may cause the | | | | supported parent whose expenses remain the same, |
| supported parent to struggle and the household to | | | | the supporting parent's expenses have now |
| go without when the supporting spouse has the | | | | increased and he now must support (5) children vs. |
| resources but is too greedy to pay. | | | | (3). It is the classic blood and turnip argument in play. |
| Under-the table or self-employment earnings | | | | While child support is clearly the child's right to receive |
| Under the table earnings - those which are paid in | | | | financial support from their parents, the court |
| cash and without regard to payroll, state or federal | | | | depends on the parents to be honest. There are |
| income taxes, have the same impact as the example | | | | some things (as described above) over which the |
| listed above. Where these earnings are even more | | | | court has no control, such as cash earnings, |
| challenging is in the ability to "show" them. Since | | | | self-employment income and the fact that support is |
| courts rely on income to determine support, under | | | | reduced when more children come into the family. If |
| the table or self-employment income pose a problem | | | | parents focus their attention on providing the best |
| because they are difficult to track. Most | | | | financial environment for their children and being |
| self-employed individuals, for example take as many | | | | honest, the less the court has to be involved and the |
| deductions as they can on their tax returns. This | | | | less expensive litigation can be. |