Question: My estranged husband owns his own company and has never reported income for taxes of more than $25,000 a year after his “expenses,” which include gasoline for my and his cars, car payments, and even phony “business trips” that were actually weekends at the beach, etc. He and I have two small children, and when I left him, he threatened that I would not get a thing from him if I sued him.

He lives pretty high on the hog, and his girlfriend is now driving a new car that I know belongs to his company. He is paying me $100 per week for two children, which isn’t enough to pay for day care expenses when I work. If a judge looks at the income he reports for taxes, I will get nothing. I'm afraid that if I sue him, I will get less than what he is paying me now.

Answer: We don’t think so. The primary focus of child support guidelines is to take into consideration the incomes and earning capacities of both parents. In order to assure a fair award, the information presented must be reliable. Because self-employment is an opportunity to maneuver income, no one should assume that W-2 income is the total money available to a person in business for himself or herself. For example, rather than take salary, the owner of a company may elect a "loan to shareholder" that isn’t reported as compensation.

In determining child support obligations, courts have broad discretion to “impute” income to a parent who, for example, is deducting depreciation of business equipment and thereby artificially reducing his taxable income.

Child support guidelines generally define “income” as “actual gross income” of a fully employed parent or the “potential income” of an unemployed or underemployed parent. “Gross income” for child support purposes can include spendable cash flow from almost any source. Unreported or underreported income, when it can be identified and proved, is also included.

Child Support Guidelines are very broad, and, since not all situations fit the same pattern, judges have discretion to determine what income is really available. For example, the court can consider income that is brought in by other members of the household to the extent it frees up the parent’s income to pay support. In addition, if brought to the judge’s attention, the courts can consider in-kind payment received by a parent from self-employment or operation of a business that reduces personal living expenses, including company cars and gasoline expenses, reimbursed meals, etc.

For the past year, more of our readers have written about the courts giving them short shrift in setting child support and having continuing difficulties collecting it. In order to level the playing field, both parents must be fully informed about "the tricks of the trade" when it comes to understanding child support guidelines and entitlements.


In our view, the most comprehensive, up-to-date resource that treats these and other issues in an understandable, practical way is a Web site located at www.childsupportguidelines.com. ONLINE READERS CLICK HERE Here, you can find the guidelines of every state in addition to up-to- date articles about child support-related matters.

We suggest you contact a lawyer in your area to help you get the ball rolling in order to protect yourself and your children.