What if my self-employed spouse lies about income?

In the case of Child v. Child, 34 So.3d 159 (Fla. 3rd DCA 2010), The Court imputed income to the self- employed Husband.  The appellate court agreed with the trial court that income should have been imputed to the Husband, but disagreed with the exact amount.

The Husband was a self-employed marine electronic technician with a reported gross monthly income of $1,759. The evidence showed that during the pendency of the divorce, the Husband paid the mortgage and expenses for the wife and children; he also paid credit card bills and children's expenses. The trial court found that husband's income was greater than he reported and imputed an additional $3,000 in monthly income to him. The District Court held:

1. "It is within the trial court's discretion to impute income to a spouse in order to determine the support awards. In addition, Florida case law has long recognized that self-employed spouses, in contrast to salaried employees, have the ability to control and regulate their income. Their testimony, tax returns, and business records accordingly may not reflect their true earnings, earning capability, and net worth."

2. "Here, the husband is a self-employed marine electronic technician, reporting a gross monthly income of $1759. He has been in this business for the past twenty years and operates his business with minimal cost at a property owned by his sister. He does not advertise his services and obtains customers based on referrals…. The husband does not have separate bank accounts or credit card accounts for his personal and business expenses…. The credit card bills varied from approximately $3000 to $15,000 a month. The husband submitted tax returns showing a reported range of gross income from $13,004 to $27,772."

3. "This record justifies the trial court's conclusion that the husband's financial documents and testimony did not demonstrate the accuracy of his reported income and that the negative cash flow, which the trial court concluded was not satisfactorily explained, supports a ruling that the husband's income was greater than he reported."

4. "We find merit, however, in the husband's argument that the record lacks competent, substantial evidence to support the trial court's imputation of the specific amount of an additional $3,000 in monthly income to the husband. At trial, the court did not explain how it arrived at this figure, and the final judgment and the record do not disclose any basis for finding that the husband actually earned or is capable of earning $3000 in additional income each month."