WORKING OFF THE BOOKS

When one spouse works off the books or in a predominately cash business, there is the fear of an inability to capture that person’s true income.  While it is true, without records and reliable tax returns figuring out a person’s true income will be challenging, there are things you can do to approximate income for support purposes.

First, you are your own best asset in these situations.  You know approximately the cost of your mortgage and carrying costs each month.  You know what type of cars you drive, and the expenses associated with them.  You know how many times a week you go out to dinner and where those dinners take place.  You know your family vacations; the amount you spend on gifts and the cost of other expenses you pay on a monthly or yearly basis.  Sit down and take your time. Your attorney will have you fill out a Statement of Net Worth.  This is where you will list out all your expenses as well as your assets and liabilities. 

Once you create this list of things, you will have an idea of how much money is spent on a monthly or yearly basis.  Assuming you’re not in a heap of credit card debt or behind on your bills, you will be able to approximate how much your spouse must be earning to at the very least cover these bills.  This lifestyle analysis will assist the Court in imputing income to the spouse if it is believed that the accounting of finances is suspect.   Rest assured that the courts are not bound to a spouse who claims they hardly make a living yet live in a five-bedroom house in an affluent area.  If there is a business involved, the Court can have a forensic expert evaluate the business and determine not only how much a company is worth, but also its cash flow.

If you are the spouse working off the books, take caution in not cooperating with the Court. You are putting your financial future in the Court’s hands.  They may impute income for you, which is far more than you earn, which will cause serious financial problems for you in the future if you are saddled with a support obligation and you truly cannot afford to pay it.  Remember, the Court is not bound to your version of your income, especially if they find your version suspect.  

Imputing income is not an exact science.  You do not want to spend months—and numerous attorney hours—figuring out what an approximate income is for the off-the-book spouse.  This will cost you time and money and you will be putting your financial future in the hands of a stranger.  Speak to your spouse and attempt to work this out.  If you cannot your attorney and the Courts will do it for you, but this will cost both of you time and money.