Transfering Utilities to Save Money

[amd64a]

What is the name of your state (only U.S. law)? Pennsylvania

I am in the middle of a divorce, and it is during the required 2 year separation period because I HAVE NOT signed the affidavit of consent. My wife moved out and NO LONGER pays her half of the mortgage. I am able to pay all of the mortgage since my new job started, but I wanted to try and get a roommate. My lawyer says that if I DIRECTLY accept money from a roommate, my wife will be entitled to HALF that rent.

HOWEVER, a friend of the family who just retired as an IRS Federal Agent suggested I do this:

Find someone to move in, and:

1) Cancel ALL utilities, cable, water ect, and wait 24 hours.

2) Have the new roommate set up the same utilities in THEIR OWN NAME and be responsible for paying them.

3) DO NOT transfer or move the money I would be "saving" from not paying the utilities, just let it sit in the checking account.

This former Federal Agent said he saw this ALL the time when dealing with Tax Evasion, and the IRS could never, ever consider this method as receiving INCOME because the Utilities ect are not REQUIRED to live in a house, and are only in the name of the person responsible for them.


Will this same strategy hold up in PA family court? My lawyer didn't even know, and said she had never heard of it ever being done before.


Any opinions or case law for me to examine?

 

[LdiJ]

What is the name of your state (only U.S. law)? Pennsylvania

I am in the middle of a divorce, and it is during the required 2 year separation period because I HAVE NOT signed the affidavit of consent. My wife moved out and NO LONGER pays her half of the mortgage. I am able to pay all of the mortgage since my new job started, but I wanted to try and get a roommate. My lawyer says that if I DIRECTLY accept money from a roommate, my wife will be entitled to HALF that rent.

I disagree with your attorney. Its true that the person who keeps the house is generally responsible for making the house payments, (because they have use of the house and the other party does not) but if a roommate is taken in because that person is struggling to make the house payment, then what your wife would be entitled to is 1/2 of any PROFIT derived from the rent paid by the roommate.

Generally, there is not a great deal of "profit" involved in a roommate situation. Lets say a roommate pays you 500.00 a month, which includes prorated utilities. From that 500.00 you would deduct prorated mortgage interest, prorated utilities, and prorated any other expenses that were included with the "rent". Your wife would then be entitled to 1/2 of any remainder. Again, generally that is not going to be much, if anything at all.

HOWEVER, a friend of the family who just retired as an IRS Federal Agent suggested I do this:

Find someone to move in, and:

1) Cancel ALL utilities, cable, water ect, and wait 24 hours.

2) Have the new roommate set up the same utilities in THEIR OWN NAME and be responsible for paying them.

3) DO NOT transfer or move the money I would be "saving" from not paying the utilities, just let it sit in the checking account.

This former Federal Agent said he saw this ALL the time when dealing with Tax Evasion, and the IRS could never, ever consider this method as receiving INCOME because the Utilities ect are not REQUIRED to live in a house, and are only in the name of the person responsible for them.


Will this same strategy hold up in PA family court? My lawyer didn't even know, and said she had never heard of it ever being done before.


Any opinions or case law for me to examine?

I basically agree with the former IRS agent, but I do not believe that the risk is worth the reward. You would then be at the mercy of the roommate for all of those items, and if the roommate turned out to be untrustworthy or moved out all of the sudden, you could find yourself in a world of hurt.

I also think its unnecessary, because again, your wife would be entitled only to 1/2 of any "profits".