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The Difficulties In Child Support Calculations Due To Cash Payments And Loss Of Employment

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Frequently in child support calculation cases if one or both parents are self-employed or paid in cash there are allegations that either or both persons are underreporting their true income for the purpose of lowering child support obligations (as well as taxes).

The Magistrates and Judges are aware that this is a common problem and the courts have developed concepts and strategies to address these allegations.  Assuming true self-employment or cash payments where there are no W-2s or 1099s then a more careful review of how bills are paid and the sources of income for their payment will likely be necessary.  

For example, if a parent is paid in cash the other parent will want to prove that the cash paid parent spends far in excess of the claimed or reported income.  If the cash paid parent states that they earn $30,000 per year but spends $60,000 per year then the cash paid person will have to show the source of the monies for the additional spending.

 If your mortgage is $2,500/mos plus car payments, car insurance, utilities, groceries, clothing, medical expenses then it is more than likely that you are spending far in excess of the above reported income of $30,000.  Possible sources besides "cash" could be gifts from other persons, family members helping, other savings and incurring debt whether on a credit card, home equity loan or private loan.  If there are no significant debts and no sources of outside support, then it is highly likely that there is additional unreported income which the court will count to determine annual income from which to calculate child support.

The court may also "impute" income to a parent which is the concept of stating that a certain job typically has income that is in excess of what the parent has disclosed.  So for example a self-employed plumber might try to claim that they only earn $50,000 per year however most judges will discredit that if they are presented with proof of the local compensation for plumbers.  If the typical full time employed, whether union or non-union, plumber earns $90,000 then the burden will shift back to the plumber to show periods of unemployment, or disability or other factors to show that the amount of income claimed is real and not unreported cash.  

Likewise, if a person claims to have lost employment the court will want to see proper proof of a replacement job search and why that has not been successful.  Keep track of all job applications, interviews, rejection letters and emails searching for employment.  Job searches should also, at least to some extent, be for comparable types of employment so that it does not appear as a deliberate large reduction from executive compensation to Uber driver for example.  That does not mean that working as an Uber driver while continuing your search is not-helpful however, it may only be a temporary income consideration.

Proving and defending claims of unreported income, loss of employment and income reductions can be complicated and it is best to have an experienced family law attorney to advance or protect you from those allegations.  

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