The Family Court Act in New York has a variety of sections that deal with the imputing of the income to a parent. Income can be imputed for non-income producing assets, the use of an automobile, fringe benefits, and goods, services and money provided by relatives and friends.
When an individual’s income is not believable, a court can find that the individual’s income is greater than what is shown on his tax returns, W2 forms, 1099 forms and other financial records.
In the case Harrington v. Harrington, 93 A.D.3d 1092, a husband had brought an appeal from a decision by a judge which imputed $30,000.00 to his annual income. The husband’s tax returns showed income between $14,000.00 and $33,000.00 for years 2005 to 2009. The judge in this case found, after trial, the husband used his business account to pay his personal expenses as well as vacations with his girlfriend and he also paid other personal expenses out of his business funds. The judge in this case imputed income of $60,000.00 to the husband. The husband brought an appeal to the Appellate Division, Third Department. The appeals court held “here evidence was presented that the husband’s claim in this regard was not actually credible and provided a rational basis for the Supreme Court’s decision placing his annual income at $60,000.00″.
Litigants in Family Court and Supreme Court proceedings regarding child support and spousal maintenance must be aware that if the court feels there is off the books or hidden income it can impute this income to the parent who is hiding it.