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practicing in Chester, Delaware and Montgomery Counties, Pennsylvania

Reader's Counsel: Hiding the cash

Q:  My husband and I are getting a divorce and he has a cash business. Of course, he is claiming that he makes only $9,000 per year (after "business" expenses) but I know that is baloney. I understand that our incomes are the primary factors in figuring child and spousal support. How do I prove what he really earns?

A:  You have probably heard that about the hardest thing to do in a divorce case is prove the income of a small-business entrepreneurial type. I agree. And the interesting thing is, no matter what you come up with I don't think anybody ever knows what the income is!

Let me tell you about (we'll call him) Billy. Billy sold stuff at flea markets. His wife (we'll call her Dotty) had been very involved in getting this "business" started - told him how to go to suppliers and buy cheap and in bulk. Told him where and how to sell. When Dotty came to me she was disabled and could work only minimally so she really needed spousal support while we were waiting for the sale of the home, etc.

Billy produced his most recent tax return - a remarkable work of fiction - to point out that he had less than $10,000 income before taxes. He also produced his tax

schedules which indicated that he had gross receipts well into the six figures for the same year!

Most lawyers are going to tell you not to bother to save receipts. Well, Dotty had saved a few receipts, some bills, and had some checking account records (but unfortunately her records were sketchy). Using them to show the cash that flowed through the household during the marriage helped prove to the satisfaction of the Master in Support that Billy had at least a $70,000.00 income and he was required to pay support accordingly. (By the way, photographs of Billy with piles of twenties didn't hurt Dotty's case either.) Had Dotty been able to save receipts for a longer period of time or had there been an appeal we would have gotten involved in further discovery and we probably could have proved even more income.

A word to the wise - if you have an unusual income or special need situation or a family income in excess of $15,000 per month, SAVE RECEIPTS! Another word to the wise - if you have signed false tax returns, you may be facing some serious tax problems in addition to your marital problems. Consult a tax attorney ASAP!

©copyright 2001, Susan V. Edwards

Susan V. Edwards, Esquire
61 Cassatt Avenue, Suite 300
Berwyn, PA 19312
(610) 725-0733
fax (610) 725-0736

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