Real Life Examples of Hidden Money in Family Law Cases
When income discrepancies come to light in family law cases, the impact on child support and spousal maintenance can be extraordinary.
Accurate income calculation goes beyond numbers on a tax return, especially when small businesses are involved. To illustrate just how significant these adjustments can be, let's look at real-world cases that demonstrate the power of digging deeper into financial details.
Case #1: $4,000 to $14,837 Monthly Gross Income
What if someone claimed a $4,000 monthly income, but further analysis revealed they were actually earning $14,837? This isn’t a theoretical scenario—it was a reality uncovered in a family law case.
Claim: $4,000/mo
Actual: $14,837/mo
Difference: $10,837/mo | $130,044/yr | 371%
This drastic adjustment created a massive difference in the financial obligations tied to child support and maintenance payments.
Case #2: Laundromat Business - $3,802 to $7,281 Monthly Income
A laundromat owner claimed a post-expenses monthly income of $3,802. However, after reviewing bank deposits and expense classifications, their real monthly income turned out to be $7,281.
Claim: $3,872/mo, $46,464/yr
Actual: $7,281/mo, $87.372/yr
Difference: $3,409/mo | $40,908/yr | 188%
That adjustment nearly doubled their declared income, leading to a fairer financial outcome for the family involved.
Case #3: Airbnb Business - Negative Income to $137,376 Annually
One of the more jaw-dropping examples involved an Airbnb and bed-and-breakfast business that initially reported a net income of negative $82,373 on tax returns. Yet, after thorough scrutiny, it was clear the actual annual income was $137,376.
Claim: -$6,864/mo, -$82,373/yr
Actual: $11,448/mo, $137,376/yr
Difference: $18,312/mo | $219,749/yr | 267%
This adjustment alone fundamentally changed the financial landscape of the divorce settlement.
The Crucial Takeaway for Family Law Professionals
Financial reports don’t always tell the full story.
These examples almost seem too extreme to be true—like outliers. But the reality is that underreported or misclassified income happens frequently, especially when small businesses are part of the equation.
It’s crucial to question the numbers presented, particularly when income plays such a critical role in determining child support or maintenance. By analyzing bank accounts, expense records, and other financial data, attorneys can ensure that outcomes are truly equitable.
Family law professionals should be prepared to dig deeper to uncover what’s real because the difference between “claimed” and “actual” income can be life-changing for a client and their family’s future.
In the event of questions or concerns, consulting a forensic accountant is recommended.