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  • Forensic Accountant

    So. I still don't have a decided income on my ex. He's refusing to get the forensic accountant because he doesn't want to spend the money.
    Is it not law that we come up with his income?

    This is the guy who doesn't dispute his income, but wants to take 75% off because he believes capital gains from real estate aren't income, bla bla bla. Although this seems to be a good stall tactic for him.
    Will he be able to argue a forensic accountants findings?
    I'm so sick of not having a final number and him stalling on it, I'm ready to pay the whole F.A. myself.
    This number makes a Huge difference in calculating CS, and I still haven't got the income for 2 years now.
    I'm really frustrated by this. Can't a judge force him to just get the damn accountant?
    My lawyer has his disclosure, do I even need ex's approval if I just pay for it? Do they need to go to his office?
    Arrrrgggg.

  • #2
    Originally posted by Karver View Post
    So. I still don't have a decided income on my ex. He's refusing to get the forensic accountant because he doesn't want to spend the money.
    Generally, if you are disputing his income statement (Form 13.1/13) it will be you who should bear the expense of a forensic accountant. Hate to break it to you this way. You should seek an offer to settle that you will pay for a forensic accountant provided he provides full disclosure for the selected professional to access all and any financial information at any institute internationally. You should also seek to agree that the cost of having this professional do this work at a later date based on the results from this professional.

    Originally posted by Karver View Post
    Is it not law that we come up with his income?
    If he has submitted a Form 13/13.1 (affidavit) then he has come up with his income in accordance with Rule 13 of the Family Law Rules. There isn't a "we" in financial disclosures. You provide a Form 13.1 and he provides a 13.1. You don't do a "joint" financial statement.

    So, if you dispute his "sworn statement" you have to present evidence. If you need a forensic accountant to do this then you will need his consent for this professional to gain access to all his financials and generally have to pay for the costs of this professional up-front yourself. You are the party in dispute with the statement so the onus falls on you to challenge his evidence.

    Should you be successful in challenging his evidence then you can seek your costs for having to retain a professional to do so.

    I also recommend that you make the investigation by the professional mutual. That you have the professional examine your financials as well. This falls under the principals of:

    What is good for the goose is good for the gander.
    You can't blow hot and cold at the same time.

    Originally posted by Karver View Post
    This is the guy who doesn't dispute his income, but wants to take 75% off because he believes capital gains from real estate aren't income, bla bla bla. Although this seems to be a good stall tactic for him.
    Take it to motion if it is something as simple as this. If it is income reported to Revenue Canada on line 150 then why do you need a forensic accountant. The justice will just look at his Notice of Assessment for the past 3 years to make any determination on CS and SS.

    If the person is self-employed then you have a different challenge.

    Originally posted by Karver View Post
    Will he be able to argue a forensic accountants findings?
    Yes. But, first you have to get one ordered. I caution you that you will be seen as "controlling" and "obsessive" if you are doing this to seek a small increase of CS.

    Generally, you only see a forensic accountant involved when estates are huge and composed of a number of different factors and most importantly assets acquired prior to the relationship.

    You may end up painting yourself to the court as "aggressive", "controlling" and looking to "win" on any minor issue. If the CS difference isn't material the justice will not impose such a broad violation of someone's privacy to achieve an objective to "win" in a civil court matter.

    Originally posted by Karver View Post
    I'm so sick of not having a final number and him stalling on it, I'm ready to pay the whole F.A. myself.
    I am surprised that your lawyer hasn't advised you that the Forensic Accountant will more than likely have to be paid by you up-front as you are the one contesting the other party's financial position. As well, I am surprised that the lawyer hasn't advised you that you will either need the other party's "consent" and/or a "court order" to get this professional involved.

    Originally posted by Karver View Post
    This number makes a Huge difference in calculating CS, and I still haven't got the income for 2 years now.
    I'm really frustrated by this. Can't a judge force him to just get the damn accountant?
    How "huge" of a difference? Child support going from 650 to 4,300 a month?

    I recommend you re-read this statement. It is very "controlling". You want a judge to "force" something on someone. I do realize you are frustrated but, this statement wreaks of "control".

    Just because you ask a judge to order something it doesn't mean they will. You have to provide evidence that is based on fact as to why the order should be made. You have to be successful on the balance of probabilities.

    Originally posted by Karver View Post
    My lawyer has his disclosure, do I even need ex's approval if I just pay for it? Do they need to go to his office? Arrrrgggg.
    Well, you could have an independent expert evaluate the Form 13.1/13 but, it will be limited to the scope of the disclosure you have gotten. Generally, someone retains a Forensic Accountant when they are "looking" for the lost money and need someone to investigate "forensically" the past history of the person in question.

    You could get a Chartered Accountant to review the statements but, you may not have enough evidence to provide any conclusive fact-based report that would be of any value to anyone.

    Also, I always recommend people really consider the impact of their conduct when they are angry/upset and making statements as you have...

    1. A Forensic Accountant costs about 190-265 an hour.
    2. A lawyer costs about 265-600 an hour.
    3. A motion of this nature is easily a long motion hearing if contested of a half day.

    Forensic accountants time is say 5 days to review materials at 7.5 hours a day at 265/h+HST.

    Lawyer's time to prepare and hear motion is about 5 days at 7.5 hours a day at 600/h+HST.

    Your time is 100/h+HST which will be about 3 days at 7.5 hours a day.

    Forensic Accountant = 11,000 (roughly)
    Lawyer = 22,000 (roughly)
    You = 2,200 (roughly)

    So this could cost you $35,200 (roughly).

    If the increase in CS is say 320 dollars a month....

    It will take you 110 MONTHS to see any return on investment for your conduct. Not a single dime of what you will have done your children will ever SEE in support as it will be consumed by the court action.

    Maybe when you start getting into where the difference between what you get and what is ordered is say an additional 1,500 a month then maybe it would be worth it... That is 23 months (almost 2 years) of lost CS payments to legal fees...

    Remember what the saying "going for broke" means... Either you are successful or you get what you were going for... "going broke"...

    Good Luck!
    Tayken

    Comment


    • #3
      After all that information Tayken, you might have taken the time to find out that Karver believes the ex made $797,000 last year.

      Well worth investing in a forensic accountant.

      Comment


      • #4
        Originally posted by SadAndTired View Post
        After all that information Tayken, you might have taken the time to find out that Karver believes the ex made $797,000 last year.

        Well worth investing in a forensic accountant.
        Believes and being able to prove are two different things.

        Comment


        • #5
          Originally posted by standing on the sidelines View Post
          Believes and being able to prove are two different things.
          Absolutely SOS but I certainly would be willing to look into it.

          Comment


          • #6
            Originally posted by SadAndTired View Post
            Absolutely SOS but I certainly would be willing to look into it.
            Yes but unless she has a vast source of funds to pay for it, it could be throwing away money.

            Comment


            • #7
              Ex has admitted hes made that much money. His and my accountant worked together to come up with the numbers he agreed to it all but says his capital gains shouldn't be in there. I'm asking EVERYONE I can whether he has a point (ex should hire ME as his lawyer) and accountants, lawyers, other real estate guy (who is also getting Divorsed) say the cap gains are included.
              He has been paying me $1000 CS a month for the past year, according to my lawyers child find program, this should have been $12,000.
              He has sent me this email:
              "The fact is we don't agree on how to classify the numbers but I don't think there is any dispute what the numbers are."

              I'm so frustrated already that what seemed so obvious has caused so much grief and money.
              Maybe I should just accept his extra $100 a month and be done with it. How do you fight a rich mean guy?

              Comment


              • #8
                so why would you need a forensic accountant if he admits to he made capital gains??? He isnt hiding it, he just doesnt think it should be included for CS, that is the real disagreement here.

                Comment


                • #9
                  So you don't need a forensic accountant, you need a judge to side with you that his income is derived from buying and selling properties, therefore his capital gains should not be excluded from his income. You're not trying to find money that is concealed, you're trying to argue against his logic that capital gains are not income. You need a good lawyer with an additional background in tax/business, who can convince a judge that your ex's income should be imputed to include some or all of the capital gains.

                  On a smaller scale, how do people who flip houses for a living report their incomes? Buy at $200k, invest $50k and time/effort, sell for $300k. Profit is obviously $50k, but how is it recorded on taxes? How is it used to calculate child support? Maybe you can find some legal precedents there.

                  I forget, are you trying to get SS as well or just CS? Should you be successful in getting CS increased in the numbers you are throwing around, you want to be very very sensible when it comes to using that money or getting used to it, because when the kids are grown, your funds will plummet.

                  Comment


                  • #10
                    not sure if this will help you or not. It seems to muddy the waters a bit more.

                    Support & RRSPs, Stock Options, Severance, Retirement Allowances, Capital Gains - Ottawa Divorce Blog

                    Comment


                    • #11
                      I've been told I could go after retro SS too, but I don't know if I will. I signed that f-ing agreement, do I really want to go to a trial to prove I was under duress? I've got lots of proof, but it's still a gamble.
                      Yes the numbers are unbelievably large -especially if SS added.
                      I've never been a big spender, I was never allowed to be, so I like to squirrel everything away- these lawyer bills are making me ill, as I'm sure we all feel.
                      So I wont be livin large and blowin all the money- I know that money won't be around every year. I should've got it when I had the chance. If I'm getting $1000 while he's eating gold dusted lobster, I'll be lucky to get $10 when he's only making $150,000.
                      My boys have a nest egg too from when my parents passed away. Everything was left to them, so thank goodness I have a bit of peace with that. Although with all these huge numbers flying around, $200k isn't sounding like alot anymore.
                      I'll check out that article...
                      Thanks

                      Comment


                      • #12
                        Originally posted by Karver View Post
                        I've been told I could go after retro SS too,
                        just because you were told something, doesnt mean that you will be successful in getting it. Its seen all the time, a lawyer will tell their client what they want to hear and in no way should that be taken as a certainty that things will pan out the way a lawyer says.

                        Comment


                        • #13
                          The forensic accounting may take a week if the ex provides a complete financial disclosure including all personal statements for the time period, as well as audited accounting records for his firm. Everything must be in order, everything must balance, everything must be above board.

                          If something is missing or looks suspicious, the auditor cannot prove anything without seeking further documentation. This adds time and the cost of the process could double or triple.

                          If the ex is making a full disclosure, then you are spending, say, $15,000 and getting nothing but proof the ex is being honest. You will pay this cost.

                          If the ex is making a serious fraudulent disclosure, then the cost will double or triple. However as some have pointed out, he is admitting the amount of capital gains, so what discrepancy will the accountant find?

                          Let's keep in mind here that a "forensic" accountant is one who reports in such a way that the result is admissible as evidence in a court of law.

                          Assume that the disclosure being made by the ex is accurate, or if he is padding expenses the amount is not worth disputing. What you want is an admissible professional opinion that his capital gains are truly income for child support purposes.

                          The nature of capital gains are defined in the Child Support Guidelines and they are certainly considered income for the purposes of calculating support. There is no wiggle room here. There are some deductions avalilable for certain Canadian funds, but these are comparatively minor. The ex cannot exclude his gains wholesale.

                          The first thing you need is a clear legal argument based on the guidelines from your lawyer that states the gains will be considered income. If your lawyer cannot do this, you either need a better lawyer, or you may need a SHORT analysis from the existing disclosure from a forensic accountant. This should not require a week of billing; it should cost more in the line of $1,000.

                          Then your ex's lawyer must produce an argument why the gains should be excluded. This argument will then be refuted by your own lawyer.

                          It seems to me that what is going on right now is an argument between you and your ex that is occuring outside the law. You are wasting time and money on "fake negotiation."

                          Have your lawyer put together a clear statement of included income, calculate the child support from that, and file an application from the courts. Stop dealing with your ex about this; let the ex's lawyer make up a counter argument in the response and take it from there.

                          Stop arguing about it. This is only wasting time and money.

                          Comment


                          • #14
                            Capital gains are considered income for the purposes of calculating CS if they are recurring (that's my interpretation anyway):

                            http://www.justice.gc.ca/eng/rp-pr/f...ide/w1-f1.html

                            Line-by-line help for Worksheet 1 - The Federal Child Support Guidelines: Step-by-Step

                            Since your ex has no problem admitting the numbers - send him the worksheet and tell him to fill it out.

                            Last edited by HappyMomma; 09-09-2013, 11:30 AM.

                            Comment


                            • #15
                              Originally posted by Karver View Post
                              He is a commercial realtor. He sold a shopping mall that he owned and developed.
                              The sale happened at time of separation. He gave me a chunk of his commission to buy me out of the house and the cars etc.
                              His company owns shares in the one that sold and 3 more properties. In our separation agreement we said I would get half of all the building sales when they sell- could be 1-10 years from now. I am not a shareholder, but he's giving me half for my half of the family business.

                              Now he's saying that his large incomes are capital gains and that they can't be used to calculate CS because he gave me half. I'm saying it was matrimonial split, otherwise what did I get for the business? He's saying f-you, it's your income. And capital gains aren't income anyway he said. But again he's renovating his castle with the money. No rrsps involved.
                              All commercial real estate sales.
                              I'm a stay at home mom of 3 small children.
                              1) So, if she is getting 50% of the capital gains, then only his 50% share would be used for CS i.e. $390K.
                              2) This is likely an unusually high earning year, so I'd say that if you take an average over 3 years, the amount might go down to $200K. Absolute guesses on my part, but just to put the $780K number into perspective.

                              So instead of $12000/mo or $1000/mo, possibly it should be around $3600/mo.
                              Last edited by dinkyface; 09-09-2013, 01:01 PM.

                              Comment

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