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Divorce & Family Law This forum is for discussing any of the legal issues involved in your divorce.

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Old 02-01-2012, 08:25 PM
momto3 momto3 is offline
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Default T4A Business Income vs. Notice of Assessment Income for Support

I was wondering if anyone could help with some guidance. My ex is self-employed (realtor) not a company. His T4A amounts 2005 $123,859/ 2006 $84,039/ 2007 $186,501/ 2008 $105,335 / 2009 $60,787 (funny we separated at the end of 2008. His Notice of Assessment Income for the same years were 2005 $49,542/ 2006 $15,593/ 2007 $47,507/ 2008 $31,102 and 2009 $25,676.

I requested an order for an income valuation because I believed that he was hiding income when it dropped so drastically after we separated. The income valuation came back supporting his numbers, it was also done by an accountant who happens to be a tenant of my ex-father-in-law and my ex-father-in-law is also a CA and CMA.

My question is how do I challenge these numbers to a judge? I was reading the Family Law Act Child Support Guidelines and it states that a Judge will impute income if "parent or spouse unreasonably deducts expenses from income" and "For the purpose of clause (1) (g), the reasonableness of an expense deduction is not solely governed by whether the deduction is permitted under the Income Tax Act (Canada). O. Reg. 391/97, s. 19 (2)." Would I have an arguement to dispute the amount of his deductions?

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Old 02-01-2012, 09:07 PM
momforever1956 momforever1956 is offline
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Momto3,

Welcome to the world of disclosure.. It is very complicated when a spouce is self-employed, I have been living this nitemare for almost 3 years. You can hire your own Business valuator and go through his books , which is exactly what I have done. I have actually more than doubled my x's income, he is a self employed professional and was even deducting his golf and ski vacations , which has nothing to do with his professional work, gift cards to his whores and even deducted a salary for someone who he admits was never employed and which he never paid one cent to. In the end I will double my spousal support but it has cost literally thousands upon thousands of dollars to prove.
If you are in the position to hire a CBV then you can send me a private message and I will foward some names of accountants that I have worked with.
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Old 02-01-2012, 09:55 PM
momto3 momto3 is offline
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I don't have the funds to do that. He controls all of the assets of our marriage.

He was ordered to pay for a income valuation to be performed by a chartered accountant qualified to perform a forensic accounting of and certified to value his income. How do I know if this accountant is that? Also what should this report look like? The report that was sent to me looks amateurish, just a couple of charts that shows his gross income on 1 page and his notice of assessment income on another put in cheap looking charts, certainly nothing that should be worth $30,000 to perform as was told to me. How does someone tackle the subject of acceptable write offs to take the income from gross to what he is claiming?
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Old 02-01-2012, 10:23 PM
momforever1956 momforever1956 is offline
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1. An accountant who is qualified would have the designation of CBV (certified business evaluator ). You did say his accountant is a CA, on the report there should be some indication of his qualifications. My husband tried at first with a regular accountant and then was court ordered to get a CBV. The report can be in many different forms--there isnt one type of report,, it is not how it is written that counts, it is the information that is within it that matters.
2. Was this accountant court appointed or did he choose someone?
3. Only expenses which relate to his business dealings can be written off, for example---as someone in real estate he will be able to deduct a certain amount for gas You need to know how much his gross income is,,,,, what he deducted and get proof of the deductions. For example, a dentist cannot write of 29k of entertainment expense, so when I asked for receipts for the write offs--who is he entertaining, then it was added back to his income. It is specific to the type of work he does. Another example would be telephone. He can write off a portion of his phone as this has a direct link to his work,,,, BUT he cannot write off his cell and his land line 100% as it is also used for personal reasons.
Another approach you can use, is lifestyle. If he is claiming to earning gross 60k a year---just write out what the expenses are for a year--mortgage, utilities, clothes, food, vacations, cars---and does it add up,, is there debt?
Unfortunately this is the added bonus in Family Law to self employed spouces and with the emotional baggage we also have to fight for the truth and fairness.
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Old 02-02-2012, 08:49 AM
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blinkandimgone blinkandimgone is offline
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Gee, that was a quick trip.
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Old 02-02-2012, 02:12 PM
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Responded in your other thread for this too. The income fluctuations you've indicated pre-date your separation. His income has varied wildly over the years, even from when the two of you were together. Given the historical info, AND the economy having tanked, his numbers are not unreasonable.

You likely do not have a case. Since he's now paid for one evaluation, check the credentials of the person that performed it to ensure they are sufficient to do so. If not, bring that up and make him do it again if you like. Otherwise, you are going to wind up spending a few thousand dollars, to recup a few hundred extra in CS payments.
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Old 02-02-2012, 04:24 PM
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Agree with NBDad. Was going to post a similar response. His income drop between 2007 & 2008 was far greater ($80 Gs) than the drop of income after your separation (some $40 Gs). It is in a history of his income pattern before and after your separation, so he could probably successfully use that to his defense. Don't push the issue too much, unless you have knowledge and proof of otherwise, because you will look like you are the one who was being unreasonable and might end up paying for his court costs.
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