• FreeAdvice has a new Terms of Service and Privacy Policy, effective May 25, 2018.
    By continuing to use this site, you are consenting to our Terms of Service and use of cookies.

Can Child Support go after my S corp?

Accident - Bankruptcy - Criminal Law / DUI - Business - Consumer - Employment - Family - Immigration - Real Estate - Tax - Traffic - Wills   Please click a topic or scroll down for more.

cms1

Junior Member
Florida
My ex wants to get more money out of me. Can child support go after my s corp?
It is a small business and I'm the president as well as the only employee.
 


Ohiogal

Queen Bee
Florida
My ex wants to get more money out of me. Can child support go after my s corp?
It is a small business and I'm the president as well as the only employee.
Yep. And she could succeed if she pierces the corporate veil.
 

LdiJ

Senior Member
Yep. And she could succeed if she pierces the corporate veil.
I am going to disagree....or perhaps to not so much disagree, but to explain what could actually be done.

You are an owner of shares in a business. S-corp on not, liens can be placed against those shares if you fail to pay your child support. Just as they can be placed against any other asset.

Since its a closely held S-corp, the court could order that a forensic accountant be allowed to audit the books of the S-corp, to determine what your real income is.

You have two types of income from the S-corp. (probably) You have the paycheck you are paying yourself, and then you have the profits that are reported on your tax return from Schedule K-1. Both of those incomes count for a child support calculation. You can possibly argue and possibly demonstrate that you are not actually taking the K-1 income out of the S-corp because the S-corp actually needs that cash, but you would have to demonstrate that with hard evidence.

If you are not cooking your books, then you should be open and upfront about everything and don't hide anything. If you are cooking your books, however mildly, you really don't want a forensic accountant auditing your books.....therefore you would be well advised to come to an agreement regarding child support.;)
 

Ohiogal

Queen Bee
I am going to disagree....or perhaps to not so much disagree, but to explain what could actually be done.

You are an owner of shares in a business. S-corp on not, liens can be placed against those shares if you fail to pay your child support. Just as they can be placed against any other asset.

Since its a closely held S-corp, the court could order that a forensic accountant be allowed to audit the books of the S-corp, to determine what your real income is.

You have two types of income from the S-corp. (probably) You have the paycheck you are paying yourself, and then you have the profits that are reported on your tax return from Schedule K-1. Both of those incomes count for a child support calculation. You can possibly argue and possibly demonstrate that you are not actually taking the K-1 income out of the S-corp because the S-corp actually needs that cash, but you would have to demonstrate that with hard evidence.

If you are not cooking your books, then you should be open and upfront about everything and don't hide anything. If you are cooking your books, however mildly, you really don't want a forensic accountant auditing your books.....therefore you would be well advised to come to an agreement regarding child support.;)

Psst... piercing the corporate veil. What I said. :p;)
 

LdiJ

Senior Member
Psst... piercing the corporate veil. What I said. :p;)
That has a different connotation in business and tax law then perhaps how you were using it. That's why I said that perhaps I wasn't actually disagreeing..LOL However, I doubt that OP would have the slightest idea what "piercing the corporate veil" means.:p
 

CJay26

Junior Member
SOS- California

I live in California, my former spouse was awarded child support, on my w2 income . He is a real estate agent, paid through his S corp, he took his taxes showing of his $140k he only earned $30K. He has recently remodeled 3 bathrooms, new windows and purchase a $55k BMW. I can not afford the child support. How can I get the judge to see that he has the ability live without my support. I am afraid if I go back to court he will expenses out even more and I will pay more support. What can I do and what are my chances if I take evidence of his car and remodel?
 

Ohiogal

Queen Bee
I live in California, my former spouse was awarded child support, on my w2 income . He is a real estate agent, paid through his S corp, he took his taxes showing of his $140k he only earned $30K. He has recently remodeled 3 bathrooms, new windows and purchase a $55k BMW. I can not afford the child support. How can I get the judge to see that he has the ability live without my support. I am afraid if I go back to court he will expenses out even more and I will pay more support. What can I do and what are my chances if I take evidence of his car and remodel?
He is entitled to child support as a reimbursement for supporting your mutual child. And this should go on your own thread. You owe child support regardless. Apparently you need to adjust your budget. If his income goes up you may find yourself paying MORE in child support. I have seen it happen.
 

stealth2

Under the Radar Member
How can I get the judge to see that he has the ability live without my support.
It has nothing to do with whether your ex can or cannot live w/o your (child) support. It has everything to do with you obligation as a parent to support your child.
 

TheGeekess

Keeper of the Kraken
I live in California, my former spouse was awarded child support, on my w2 income . He is a real estate agent, paid through his S corp, he took his taxes showing of his $140k he only earned $30K. He has recently remodeled 3 bathrooms, new windows and purchase a $55k BMW. I can not afford the child support. How can I get the judge to see that he has the ability live without my support. I am afraid if I go back to court he will expenses out even more and I will pay more support. What can I do and what are my chances if I take evidence of his car and remodel?
How about starting your own thread instead of HIJACKING and NECROPOSTING? :cool:
 

Find the Right Lawyer for Your Legal Issue!

Fast, Free, and Confidential
data-ad-format="auto">
Top