HOW ARE INCOME IMPUTATION DECISIONS MADE BY THE COURT
Presented here by Terry Bankert a Genesee Flint Family Law Attorney 810-235-1970
1. REAL INCOME
A. What is the real income of the self employed engaged in an underground economy with unreported income?
HEYYUZA VS HEYZA no 282790 unpublished The court opinionated that even if a party has unreported income, form purpose of calculating support, taxes that would be owed on that income should be taken into account. MCSF 2.02 3
EXAMPLES.
Landscapers
Beauticians
Personal Trainers
Dance Instructor
-BERGER VS BERGER ABility to earn $50,000 per year as a nurse dance instructor see MSSF 2.01 G 2, a, b, d, h
Manicurists, nail techs
Restaurant business
Bar Business
Party Stores
Construction
Home Improvement
Maintenance
Contractor Generally
Mason
NOVAK VS NOVAK no. 275267 July 22 208 . no imputed income because of mortgage application stated income but masonry skills and past employment imputed at $65,000.
Electricians
Plumbers
anyone doing side jobs
House Cleaners
Commercial Cleaners
Exotic dancers
Escorts
Companions for elderly
Professionals generally
Lawyer
Doctors
Dentist
chiropractors
holistic health people
Truck Driver
MCDOWELL VS MCDOWELL No 273807 May 22 2008 unpublished it Truck driver imputed income when working after leaving his own company business. okay to subtract operating expenses and taxes. MCSF 2.021 2 G a d e h
b. unexercised ability to earn
STALLWORTH VS STALWORTH 275 Mich App 282 (2007) Criminal sentence is not a voluntary reduction.
b.WIERINGA VS WIERINGA no 288475 June 16 2009 Unpublished. It was not an abuse of discretion to not impute income to a spouse who was a homemaker and home-schooled children, two with special needs MCSF 2.01 G 2 a i ii.
b.MORK VS MORK no 283270 june 23 2009. appropriate to not impute income wife limited work experience, tried to find work, . include husbands employer provided room food, work experience did not warrants an unexercised ability to earn.
b.MYLAND VS MYLAN Court cannot guess but must use imputation factors MCSF 2.01 G 2 a b.
b.TOAL VS TOAL The Court of Appeals found that it was appropriate to impute income to plaintiff husband in the amount of $350,000 where he was previously employed as an investment banker and had retained investments. It was appropriate to consider plaintiffs unexercised ability to earn more than he was earning as a teaching coach. The court pointed out this was not a deviation but an appropriate imputation of income as permitted by the Michigan CHild SUpport formula MCSF 2.01 G 2 a b h
b. VANGESTR V VANGEST No. 294427 March 1,2011 [unpublished]
The Court of Appeals upheld a trial court's decision to award a substantial spousal support to balance the parties income taking into consideration the fact that the defendants income had been reduced by $10,000 per year because of a drunk driving conviction.
b. CARLSON V CARLSON No. 292536 June 26 2011 The COurt of Appeals found that the trial court abused its discretion in failing to consider the factors enumerated in 2004 MCSF 2.10 (E) or finding that the defendant had the actual ability and likelyhood of earning the imputed income. MSCF 2.01 (2)(G)(h)
c.The use of forensic accountants for business practices
MORRIS V MORRIS No 301555 January 31 2002 unpublished. The Court of Appeals found no error in imputing income $35,000 per year to plaintiff /payer who flipped houses and an expert was used to present an analysis of plaintiff business income.
d.Lifestyle analysis including support from friends and relatives
BYERS VS BYERS No. 300027 May 5 2011 unpublished
The Court of Appeals upheld a trial court's child support and spousal support award essentially relying on evidence of defendants “ lifestyle” and ability to pay his bills arriving at imputing income of $52,000 to him. Specifically refers to Michigan Child SUpport Formula factors MCSF 2.01 (G)(2)(h)
HOSTED V HOSTED No 299116 December 20, 2011 The COurt of Appeals remanded the issues of spousal support back to trial court for specific finding as to the alimony factors., but did not reverse the trial court's finding that the defendants business records could not support his lifestyle and imputed income of $61,280 pr year to him. Comparable factors MCSF 2.01 (G)(2)(h)
e. Cash Flow analysis see Cunningham
f. Earning capacity
RIEBSCHLEGER VS RIEBSCHLEGER No 270226 February 21 2008. The court of Appeals differentiates between imputed income and earning capacity. Court can impute additional money to arrive at spousal support award.
GEORGE VS GEORGE no 277186 August 2008 unpublished . The court held the use of the Department of labor statistics in determining income attributable to child support payer MSCF 2.01 G 2 a b c
MORRIS V MORRIS No 301555 January 31 2002 unpublished. The COurt of Appeals found no error in imputing income $35,000 per year to plaintiff /payer who flipped hjouses and an expert was used to present an analysis of plaintiff business income.
RUGIERO VS RIEGRO No 301829 June 19 2012 unpublished. The trial Court did not err in treating bank deposits as income. Plaintiff/payer was employed in a family restaurant business. The trial court added bank withdrawals to determine the amount plaintiff needed to cover his expenses and multiplied by 12 to determine plaintiffs yearly income deducted payments related to car expenses and added 25 percent(for taxes) to determine plaintiff had a gross income of $88,000 per year.
2. Voluntary termination versus loss of job
CHIPPS VS CHIPPS No. 291755 February 23, 2012 (unpublished)
The Court of Appeals upheld the trial court’s decision to impute income to defendant of $113,000 per year consistent with his prior employment where defendant voluntarily left his job to work at his church for $36,000. This was despite the fact that defendant testified he could no longer get his job back. The Court of appeals noted the defendant was free to file a petition to modify the child support in the future if defendant finds that “due to the economy or some other factor” he was unable to find employment at the imputed level by the trial court. MCSF 2.01 G 2 a b h
WILSON V WILSON No 31719 June 21 , 2011 [unpublished] Imputation to woman payee was found to be appropriate where parties had owned a business neither wanted to continue to operate. The imputed income amount was between what she would earn working full time at minimum wage and what she would earn as a dental hygienist which she was trained to do. MCSF 2.01 (G)(2)(a)
a. The impact of divorce on someone's income, how skeptical should it be when someone's income goes down.
a. ANDREWS VS ANDREWS No 274338 March 11 2008 unpublished, Signing over interest in income producing partnership voluntary and bad faith reduction in income.
a .ASHBAKER VS ASHBAKER no 296947 October 18 2011 unpublished
The Court affirmed the trial courts decision not to impute income to a 62 year old spousal support payer who elected to retire and receive social security after he sold his business and experienced health problems MCSF 2.01 (G)(2)(a)(c)
b. What income averaging will you use--three years.
b.SPAGNUOLO VS SPAGNUOLO no 275439 May 21 2009 unpublished. The Court of Appeals found no error in income averaging over a three years to determine defendant/payers income when there was a significant variation in defendants yearly income.
c.What about a spouse who has been a stay at home mother or dad and out of the market for more than ten years. Do you impute income?
3. What about the economy since 2008.
A. Look to the Michigan Child Support Formula
B. Applicable Case law and Equivalent Factors under 2008 MCSF 2.01 (G)(2)
C.MICHIGAN OCCUPATIONAL WAGE GUIDELINES
c. LANDON VS SHELTON No. 297064 December 21, 2010 Unpublished.
The Court of Appeals reversed the trial court adoption of the referee's recommendation that the defendant / payers income be imputed at $51,800 based on the Michigan Occupational Wage guidelines for a property and real estate manager because there was no additional findings to support imputation to defendant in this amount.
D.BALANCING OF INCOMES
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Imputation of income by Henry Gornbein, & Betty Lowenthal Presented at American Academy of Matrimonial Lawyers Michigan CHapter, Advanced - Level Family Law Seminar Thursday May 02 2013 Birmingham Michigan
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