Justice Duffy sitting in a Supreme Court Part in Westchester County recently ruled a man had to pay his ex-wife more than $282,000 in back child support and spousal maintenance payments. Judge Duffy determined the man had improperly taken personal expenditures including, but not limited to, a mountain climbing trip to Mount Everest as a business expense. Judge Duffy ruled the man had been artificially reducing his income from the years 2007 to 2012 to avoid paying the appropriate amount of child support and spousal maintenance to his ex-wife.
The expenses written off by the man included a 2010 three week trip to train to climb Mount Everest. The man had claimed this was related to his work concerning marketing mountain climbing gear. The judge found the husband’s explanation for the trip to be “not plausible.” She took into consideration, with regard to his writing off this trip, he was the only shareholder, only board member, and only officer of the company, which he created in 2007, that wrote off the expenses. Judge Duffy also found the husband had written off expenses related to a trip to Israel in 2007. This trip coincided with his son’s Bar Mitzvah in Israel. The man claimed during the trip to Israel he had met with representatives of an Israeli clothing company.
Corporate Funds Used to Pay Husband’s Lawyers’ Fees
The man had admitted to the use of corporate funds to pay his lawyer’s fees to litigate this post divorce legal action. The husband testified the entire amount of his lawyer’s fees in the case, which was $20,000, was paid for by corporate funds.
Husband Must Pay Child Support and Spousal Maintenance
Judge Duffy held the ex-wife was correct in alleging her former husband must pay child support and spousal maintenance payments pursuant to the divorce formula in her 2005 divorce agreement which included the expenses the husband wrote off.
The man tried to receive a credit of $7,000 he paid from corporate funds in 2010 to his sons who were aged, at that time, 19, 15, and 10. He claimed those funds were related to business related positions maintained by his children. With regard to this issue, Judge Duffy held “a non-custodial parent is not entitled to offset any voluntary payments made for the benefit of the children against the support he is required to pay to the custodial parent.”
Conclusion
Business expenses should be real business expenses and not be created to hide income thereby reducing a party’s support obligations.
About Elliot S. Schlissel
