Self Employed Car Dealer Needs Detailed Evidence of Actual Income

Tennessee child support case summary on income determination.

In Re Britton H-S.

The child in this Montgomery County, Tennessee, Juvenile Court case was born to unwed parents in 2014.  The father filed a petition to establish a permanent parenting plan and alleged that he was unaware of the child’s whereabouts.  The mother answered, and requested that the father’s visitation be supervised due to alleged harassing behavior.

The trial court, Judge Vicki S. Snyder, initially ordered supervised visitation, but then removed this requirement.  Both parents were ordered to submit to drug testing.  The mother was named primary residential parent and denied the father’s request for greater parenting time.

Various issues were litigated, including child support.  The father owned two successful car dealerships, but his most recent tax return showed a loss of $117,000.  But the mother produced a pay stub showing the father’s gross income of over $6000 for two weeks.  The father denied that he had ever received that amount, and testified that the pay stub was created for personal use to determine the tax implications of taking a salary.

The trial court found that the father’s testimony was not credible, and set child support at $1251 per month.  The father then appealed to the Tennessee Court of Appeals.

After addressing various custody issues, the appeals court turned to the issue of child support.  The father argued that the lower court had not followed Tennessee child support guidelines, and the appeals court first noted that the first step was determining the parties’ gross income.

The appeals court first pointed out that the father’s car dealerships were successful and supported a “lavish lifestyle.”  As to the pay stub, the appeals court pointed out that it surfaced when the father had produced it at an earlier hearing.  It recognized that self-employed parents can manipulate their reported income by maximizing expenses, and for this reason, the guidelines do not allow deductions for excessive expenses such as travel and personal expenses.  In addition, depreciation, investment tax credits, and other deductions are not allowed for child support purposes.

It noted that when it is apparent that actual income exceeds reported income, then the court must rely on other evidence.  However, that evidence must be reliable.

In this case, the appeals court noted that the juvenile court had not made specific findings as to how the father’s income was calculated.  Therefore, it had to vacate the lower court’s decision and send the case back for entry of an order that complied with the rules.

After addressing some other issues in the case, the Court of Appeals remanded the case.

No. M2016-01576-COA-R3-JV (Tenn. Ct. App. Feb. 23, 2018).

See original opinion for exact language.  Legal citations omitted.

See also Tennessee Parenting Plans and Child Support Worksheets: Building a Constructive Future for Your Family featuring actual examples of parenting plans and child support worksheets from real cases available on Amazon.com.