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Self Employed Spouses, Parents, Child Support, Divorce and Proving Income

Family law and divorce proceedings can come with a whole host of different complications. Disputes and confusion may occur over child custody, child support, equitable distribution, spousal support, and in certain cases even orders of protection. Every family will have its own unique problems to navigate during a proceeding. One of the issues that causes conflict most commonly is the proving of income of the party’s spouse or partner.

In the state of New York, child support is made payable to the parent who holds custody until the child is emancipated. Spousal support may be awarded by a court while a couple is still married. Spousal maintenance is also known as alimony, and refers to the payments that a party may make to their spouse during a divorce proceeding or following a divorce proceeding. This payment is meant to help an individual with lower income to be placed into a position where they can support themselves. Depending on the circumstances of the case, spousal support might also be used to allow the paid individual to gain necessary employment training for a new job. As of 2016, the state of New York has income-based guidelines for child support, spousal support, and spousal maintenance.

In court, the challenge is this: How does one party prove the other’s income when the other party is not being honest about their income? This can occur when one party is self-employed or works “off the books.”

Determining Income Details

If one or both of the spouses or parents involved in a case is self employed or working off the books, the issue becomes more complex. Self-employment includes owning your own business, being an independent consultant, or being a licensed professional with no official employer. In these cases, you need to find a way to prove the income of the other party in order to work out the details of child support or spousal maintenance. Proof of income is essential during these proceedings because income is the largest factor regarding whether the court awards child support, spousal support, or coverage for attorney fees. If the spouse or parent in question is a standard employee, it’s easy to attain proof of income. All you need is a paycheck or W-2 form. But providing the income of a spouse who is self-employed or working off the books can be difficult, because many self-employed people claim large numbers of expenses on their tax reports.

One way of attempting to prove a person’s self-employed income is through showing their lifestyle. A person might provide an analysis of the spouse’s expenses and compare it to the income they claim. If the expenses are much larger than the claimed income, the claimed income may have grounds to be disputed. Evidence of activities and assets can come through documents, witnesses, social media posts, and photographs. The party in question might hire a private investigator in order to gather further evidence. If someone else pays the spouse’s expenses, the court might add to the child support or spousal maintenance based on the amount the other party allegedly pays for.

If a partner in a divorce proceeding provides inaccurate information about their income, they may be subject to charges of perjury. During a divorce proceeding, when an attorney files a motion to cover spousal maintenance, child support, or attorney fees, each side of the proceeding will be required to give information about their expenses and income. Regardless of the reason for the requested information, New York law requires these forms to be filed accurately. When a partner is self-employed, sometimes a profit and loss statement is useful.

Forensic Accountants and Discovery

When spouses undergo a divorce proceeding, one potential option they have is to use discovery techniques. Discovery can be time consuming and expensive, but it may be essential when a person needs a way to prove their spouse’s income. In divorce litigation, most information is relevant to the proceeding and therefore discoverable. If you request information related to a party’s income, then the court should grant that request. In other words, you might ask for your spouse’s bank statements as well as information about their self-employment. If the spouse refuses to provide this documentation, the court might compel them to give the information through a subpoena or multiple subpoenas.

There is another option, which is asking the court to appoint a forensic accountant or hiring a forensic accountant yourself. This accountant will work with you on your particular proceeding. In certain cases, this method may be the only one that can allow an accurate determination of your spouse’s income. A forensic accountant can analyze documents that your spouse holds and decide whether the spouse’s actual outcome will be applicable in a spousal support hearing. Depending on the details of the case, the court might appoint a forensic accountant to evaluate the legitimacy of a company’s claimed income amounts.

Diligence

It’s safe to say that most couples don’t go into their marriages expecting to divorce later. That said, you should still watch over your accounts and details of your spouse’s income while they are self-employed, especially if you’re worried about the state of your marriage. Sometimes paying attention to your spouse’s bank account can give you an idea of their overall income. Proving the income of a self-employed individual is difficult, time consuming, and sometimes expensive. But it can be important to put in the extra effort if you think you’ll need spousal support after your marriage ends.

We are New York lawyers who can answer questions about New York family law and divorce proceedings. If you have questions about what information you should gather prior to a divorce proceeding, feel free to contact us for a consultation. We can also clear up further queries about spousal maintenance, child support, and the requirements for each of these factors to be issued by the court.