A Florida Judge Just Disallowed All of My Business Expenses in My Alimony and Child Support Case… What Can I Do?

We all make mistakes. For some people, that may mean putting some less-than-perfect information in a tax return. For others, that may mean using that flawed return in a divorce proceeding. Now, to be clear, you should never cheat on your income taxes and you should never provide to a court any proposed piece of evidence that is inaccurate, misleading or false. However, even when you have made mistakes in the pursuit of a divorce, there are still limits on the actions that the judge can take. An experienced Fort Lauderdale divorce attorney can help in cases like this in many ways. Your experienced attorney can help you make sure that you avoid submitting documents to the court that lack candor and, if you’ve made mistakes before you hired counsel, your attorney also can help protect you when a judge oversteps her legal authority.

As an example of how these kinds of boundaries can work, there’s the Orange County case of M.B., who was a self-employed commercial truck driver and a husband going through divorce. At his divorce trial, the husband presented numerous financial affidavits and three years of tax returns. “The tax returns — which included deductions for business expenses and for cost of goods sold — showed a significant disparity” between what the husband actually made and what he declared as his final taxable income, according to the appeals court.

At trial, the husband disclosed that his work entailed only transporting goods, and that he did not actually sell goods. That, of course, was a problem for the husband and his case. Based on this evidence, the judge decided that the husband’s tax documents did not accurately display his true income and the judge imputed income to the husband.

Was does it mean when a court ‘imputes’ income?

When a court imputes income, it means that the judge decides what a party’s income really was (and not what that party said it was.) So, for example, if the court thinks that you have been deceptive or not forthcoming about your income, the court can treat you as having a higher income than what you declared.

Alternately, it may mean deciding what the party’s income should have been (as opposed to what that party actually received in earnings.) If you’re a world-renowned thoracic surgeon living in Miami Beach, but you leave your practice and take a job as a coffee barista after your spouse files for divorce, the trial court can treat you as if you were actually making an amount commensurate with a top-notch Miami thoracic surgeon, and not use your actual barista earnings to calculate your alimony and child support obligations.

In this trucker’s case, the court decided to impute income to the husband at a level equal to the husband’s gross income, effectively stripping away not only the husband’s cost-of-goods-sold deductions, but all of his business deductions.

The judge wasn’t entitled to disallow all of the husband’s declared expenses

That action by the judge, according to the appeals court, went too far. Even when a party submits evidence that “lacks candor,” Florida law remains very clear that a spouse is entitled to have the court “consider ordinary and necessary business expenses in arriving at the final determination of income.”

Disallowing and refusing to consider all of the expenses that the husband claimed under “cost of goods sold” was proper and within the power of the trial judge based on the court’s finding that the husband’s paperwork lacked candor. Disallowing and refusing to consider all of the husband’s other business expenses was a violation of the requirements established by Florida Statutes Section 61.30(2)(a) and entitled the husband to a reversal.

The right legal counsel can help you in so many ways. That may include making sure that the case you present is properly presented. It may mean protecting you from a judge who has overstepped her legal authority in determining alimony or child support. It may mean any of countless other things. Rely on the skilled South Florida family law attorneys at Sandy T. Fox, P.A. to give you that kind of thorough and reliable legal representation in your alimony and child support case. Contact our attorneys online or by calling (800) 596-0579 to schedule your confidential consultation.