Proving Cash Income for Child Support and Alimony in Tennessee Divorce

At September 11, 2013
By Miles Mason
In Alimony, Child Support, Income Determination
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Proving cash income for child support and alimony purposes in Tennessee divorce

Most Tennessee divorces include court orders for the payment of child support, for the award of alimony to a spouse, or for both. But how much support should be ordered? Although every case has unique circumstances and exceptions may exist, determining fair an appropriate family support requires proof of all spousal income.

Other factors are important as well (the number of children in the household or the educational level of the spouse seeking alimony), but proving spousal income is essential. When paystubs, W-2s, or 1099s are readily available, they evidence a party’s income in black-and-white. Proving that a spouse has cash income, however, is seldom that straightforward.

Some spouses operate cash-only side businesses (seasonal lawn care services, handyman services, weekend music gigs, or custom art sales) leaving no paper trail for the other party to prove that additional cash income exists, let alone how much, for child support or alimony purposes.

Consider the waiter, hair stylist, personal fitness trainer, or golf caddy, to name only a few, who receives a substantial portion of income in the form of cash tips, yet does not declare all tips received in a year to the taxing authority. When a small business owner is paid in cash for goods or services, he could run those chits outside the till so there is no record. A gambler may not report cash winnings. With all of these examples, the result is an income tax return that does not accurately reflect actual gross income and, once again, leaves the spouse with the burden of proving the other party’s cash income exists without the obvious benefit of a paper trail.

Hide and Go Seek – Identifying Cash Income

Knowing that child support and alimony calculations are based largely upon an accurate assessment of income from any and all sources, look for red flags indicating there may be cash income that a party is attempting to hide from the other spouse and from the family court.

Although nothing can replace competent legal advice from a Tennessee family lawyer, here are a few general tips for finding hidden cash income for child support and alimony:

● Seek third party records that may indicate greater financial resources than what the party has reported or admitted to. A careful examination of credit card statements and bank statements, for example, may provide clues to the presence of hidden cash income.

● Show extraordinary luxury purchases that do not comport with the party’s reported income, such as an expensive sports car, fine art purchase, or a Mediterranean cruise. Does the party appear to be leading the life of Riley with undeclared cash income?

● Hire a forensic accountant (CPA) to apply a lifestyle analysis which could establish, in part, whether there is a significant disparity between the party’s reported income and regular spending habits.

Attempts to secrete cash income occur far more often than most spouses would like to believe. With every divorce involving alimony or child support, and in child support modification cases, learn where to look for clues to hidden income by reading:

How to Prove a Spouse Is Hiding Income | Tennessee Divorce and Support