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Claims for Child Support Must be Supported by Adequate Evidence of Income

Calculating child support during a divorce or custody proceeding can be a challenge. The Oregon Child Support Guidelines use each parent's gross income to establish the child support amount ordered in each case.

2011-06-17
June 17, 2011 (Press-News.org) Calculating child support during a divorce or custody proceeding can be a challenge. The Oregon Child Support Guidelines use each parent's gross income to establish the child support amount ordered in each case. Often, such as in cases where a parent is self-employed, there may be a dispute about how much income a parent actually earns each year.

A recent Oregon Court of Appeals case, In Re: Matter of Marriage of Mathews, illustrates the challenge a court can face when presented with this issue.

The Administrative Law Judge's Calculation of Gross Income

In this case, the mother initially requested an administrative review of the parties' child support order. At the time, the parties' child support order required that the father pay mother $300 per month in child support for the parties' two children. The initial child support review hearing took place with an administrative law judge ("ALJ"). During the hearing, the ALJ determined that there was insufficient evidence in the record to determine the father's actual income, and the ALJ estimated that the father's potential income was $9,886 per month. Based on the ALJ's estimation of the father's income, the ALJ ordered that the father's child support obligation should be increased to $1,458 per month.

The Trial Court's Calculation of Gross Income

The father appealed the ALJ's order to the trial court.

Both parties owned taverns, and each party testified about the tavern business at trial. The only documentation of income that the father provided to the trial court was his 2007 and 2008 tax returns. He did not provide the trial court with any documentation to support the profits and expenses listed in his tax returns. Although the father's tavern was profitable in 2007, he claimed that his tavern lost money in 2008 due to the failure of some freezers, the resulting loss of food stored in the freezers, and the promotional give away of liquor at the tavern.

The trial court judge concluded that the father's evidence lacked credibility: "I do not believe that [father] is telling the truth. It's simply not credible that he would-in a tavern business that he would, given the markup on alcohol and so forth, that he would be selling--that his sales would be less than the cost of goods sold."

Because the mother also owned a tavern, the trial court relied on information derived from evidence the mother presented at trial to create a ratio of receipts to cost of goods sold. Based on those numbers, the trial court judge determined that the father's potential income was $92,896 per year, and the trial court ordered that the father's monthly child support obligation was $1,319.

The Court of Appeals' Calculation of Gross Income

Father appealed the trial court's decision. The Oregon Court of Appeals did not agree with the method the trial court employed in determining the father's gross income, because there was no more evidence in support of the trial court's calculation than there was for the father's unfounded assertions.

The Oregon Court of Appeals referred to the Oregon statute that outlined how to calculate actual income for a self-employed party. Gross income is defined as:

"gross receipts minus costs of good sold, minus ordinary and necessary expenses required for self-employment or business operation."

The Oregon Court of Appeals found that there was not enough evidence presented by the father at trial to allow the court to calculate the father's actual gross income. The Oregon Court of Appeals calculated the father's potential gross income as $75,145 per year, and ordered the trial court to recalculate child support based on the potential gross income for the father that was determined on appeal.

Importance of Sufficient Evidence of a Parent's Income

This case illustrates the importance of providing adequate and accurate evidence of income for both parents in legal proceedings relating to the calculation of child support.

Whether you are obtaining an initial child support order or requesting a modification, a knowledgeable attorney can help you determine what steps you should take to adequately prove your income and to verify the opposing party's income for purposes of calculating child support.

Article provided by Jensen & Leiberan PC
Visit us at www.jensen-leiberan.com


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[Press-News.org] Claims for Child Support Must be Supported by Adequate Evidence of Income
Calculating child support during a divorce or custody proceeding can be a challenge. The Oregon Child Support Guidelines use each parent's gross income to establish the child support amount ordered in each case.