Email Adam Email
Financial
Jan 15, 2016

Blood From A Turnip

Sponsored Content provided by Adam Shay - Director of VCFO Services, Red Bike Advisors

This Insights was contributed by Richard Pasquantonio, CPA/CFF, CFE, CDFA (N.C. License Number 33577), an associate at Adam Shay CPA, PLLC.
 
While exhibiting at the 2015 N.C. Bar Association Family Law Intensive in Raleigh, N.C., I had the opportunity to attend  Robin Stinson’s and Maria Vargas' presentation entitled, “Imputing Income in Alimony and Child Support Cases.” In preparing for this article, I was researching some funny quotes related to the topic of divorce; I came across some really dark stuff … really dark, actually.
 
However, during that process, I also came across Helen Rowland. Rowland was a turn-of-the-century American journalist and humorist. She wrote a column in the New York World newspaper called “Reflections of a Bachelor Girl.” Rowland's popularity at the New York World resulted in her work being published in book form, including “Reflections of a Bachelor Girl” (1909), “The Rubáiyát of a Bachelor” (1915), and “A Guide to Men” (1922). Her anecdotes are pithy and her delivery punchy. All in all, her work is really funny and edgy. I suspect that she was quite a controversial figure during her day, and I would have enjoyed her company. A selection of her quotes can be found online.
 
Helen once quipped so relevantly, “Love, the quest; marriage, the conquest; divorce, the inquest,” and today I would like to discuss the inquest as it relates to a supporting spouse’s earning potential to provide some insight into how a dependant spouse might actually get blood from a turnip.
 
As “Imputing Income in Alimony and Child Support Cases” discussed, N.C. General Statute Section 50-16.3A(b) provides that in determining an amount, duration, and manner of payment of alimony, the court shall consider all relevant factors, including (in relevant part):

  • The relative earnings and earning capacities of the spouses;
  • The amount and sources of earned and unearned income of both spouses, including but not limited to earnings, dividends and benefits such as medical, retirement, insurance, social security or others;
  • The relative education of the spouses and the time necessary to acquire sufficient education or training to enable the spouse seeking alimony to find employment to meet his or her reasonable economic needs.
Any discussion of the statutory requirements must be weighed in context of the courts' interpretations. The N.C. Court of Appeals has stated that “ordinarily” the actual income of the party should be considered, and in order to base alimony on earning capacity the plaintiff must prove that the defendant is intentionally depressing his or her earnings to avoid paying support, including self-support by a dependant spouse.
 
Lees Family Law § 9.26 at 341 describe examples of behavior that show a spouse’s intent:
  • refused to seek or to accept gainful employment;
  • willfully refused to secure or take a job;
  • deliberately not applied himself or herself to a business or employment;
  • intentionally depressed income to an artificial low; 
  • voluntarily left employment to go into another business, or
  • has training and experience, but little or no income.
The courts have repeatedly found that it is not sufficient to show facts that a spouse deliberately depressed their earnings, but that there must also be facts showing that the earnings were dpressed to avoid support. 
 
Stinson and Vargas, in their presentation, provided this example case, Yeun-Hee Juhnn v. Do-Bum Juhnn (N.C. Ct. App. July 7, 2015) to illustrate the finding of facts necessary to uphold the use of the earning capacity rule. In this case, a husband was determined to have acted in bad faith when he:
  1. Intentionally shut down his brokerage business;
  2. Intentionally understated his corporate income by at least $44,684.00;
  3. Prepared and submitted “spurious” income tax returns with falsified and inaccurate information and forged the wife’s signature on the returns;
  4. Supported his paramour and her children while refusing to provide support to the wife and children;
  5. Engaged in voluntary unemployment and underemployment or is “simply hiding income.”
So it may be that Helen Rowland had this gentleman in mind when she said that, “A bride at her second marriage does not wear a veil. She wants to see what she is getting.”

Richard Pasquantonio, CPA/CFF, CFE, CDFA (N.C. License Number 33577), is an associate at Adam Shay CPA, PLLC. He focuses on forensic accounting, fraud prevention and detection, and tax controversy resolution. Richard is also an AICPA CFF Champion. The purpose of the CFF Champion program is to inform the professional community about the vital role of forensic accounting professionals, the knowledge required to become a CFF, and the benefits of the CFF credential. For more information, visit http://www.wilmingtontaxesandaccounting.com/ or email him at [email protected]. He can also be reached by phone at (910) 256-3456.
 

Adam Shay, CPA (N.C. License Number 35961), MBA, is managing partner of Adam Shay CPA, PLLC. He focuses on minimizing taxes and improving the financial results of entrepreneurs, and is actively involved in supporting the Wilmington entrepreneurial and startup community. For more information, visit http://www.wilmingtontaxesandaccounting.com/ or email him at [email protected]. He can also be reached by phone at (910) 256-3456.
 

Other Posts from Adam Shay

Redbikeadvisors block[55]
Ico insights

INSIGHTS

SPONSORS' CONTENT
Untitleddesign4

Paving the Way to Better City Streets

Tony Caudle - City of Wilmington
Chris 16239425

‘Creative,’ An Adjective To Describe Your Accountant?!

Chris Capone - Capone & Associates
Chris coudriet

As the Weather Warms, New Hanover County Remains Committed to Keeping Things Green

Chris Coudriet - New Hanover County Government

Trending News

Passenger Rail Study Offers New Details About Proposed Wilmington To Raleigh Route

Emma Dill - Apr 22, 2024

Severe Weather Postpones Trump Rally In Wilmington

Emma Dill - Apr 20, 2024

Will NC Be CNBC's Three-time Top State For Business?

Audrey Elsberry - Apr 22, 2024

In The Current Issue

Surf City Embarks On Park’s Construction

“Our little town, especially the mainland area, is growing by leaps and bounds. So having somewhere else besides the beach for kids to go an...


Info Junkie: Lydia Thomas

Lydia Thomas, program manager for the Center for Innovation and Entrepreneurship at UNCW, shares her top info and tech picks....


Bootstrapping A Remote Option

Michelle Penczak, who lives in Pender County, built her own solution with Squared Away, her company that now employs over 400 virtual assist...

Book On Business

The 2024 WilmingtonBiz: Book on Business is an annual publication showcasing the Wilmington region as a center of business.

Order Your Copy Today!


Galleries

Videos

2024 Power Breakfast: The Next Season