Patricia Spence V.S. Walter Guy Chalow<\/p>\n
Patricia, the plaintiff, and Walter, the defendant, were divorced in January 1995, with two children. The PSA (property settlement agreement) incorporated into their final judgment a child support obligation upon the defendant of $150 week. The PSA noted that this amount was not \u201cbased on the child support guidelines because both parties are self-employed\u201d(Walter was a contractor; Patricia, a \u201ccredit searcher\u201d) \u00a0their incomes fluctuate and cannot be precisely determined.\u201d\u00a0 The court determined that the defendant\u2019s annual income was $153,199 and set a child support obligation of $267 per week.<\/p>\n
<\/p>\n
This calculation included an imputing of $21,755 in income as a \u201cwrite-off of dues and other charges\u201d. These write offs were amounts that were due to the Sand Barrens Club and Driftwood RV Center. In 2010, the defendant filed an appeal that raised several challenges to the judge\u2019s calculation, including his decision to impute the previously written off $21,755. He challenged that this figure represented a debt that the clubs, which are related entities, refused to pay. The only evidence presented in defense of this claim was a letter from Driftwood, stating that \u201cbefore making any payment related to this balance [on an enclosed statement], [the club] would appreciate the opportunity to discuss a few invoices.\u201d The lack of sufficient evidence led the plaintiff\u2019s expert, Pelosi, to conclude that a barter relationship existed between the defendant and these entities. At the hearing, Pelosi testified that when the defendant was reimbursed by the services of these entities, he would incorrectly write the amount off of revenue, instead of recording it as an expense. The judge concluded that \u201c[t]he inference that [defendant] received a personal benefit has not been overcome\u201d and upheld his decision to impute the additional $21,755 of additional income to him.<\/p>\n
In addition, the judge found that the defendant had underreported his income as a result of his incorrect accounting, and therefore decided to send a copy of his decision to both the New Jersey and Federal Taxing Authorities for their consideration.\u00a0 This decision was pursuant to the case of Sheridan v. Sheridan, a case in which a serendipitously discovered tax aversion was reported to the taxing authorities.<\/p>\n