Matter of Hatlee v Hatlee

[*1] Matter of Hatlee v Hatlee 2013 NY Slip Op 23194 Decided on June 17, 2013 Supreme Court, Clinton County Lawliss, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the printed Official Reports.

Decided on June 17, 2013
Supreme Court, Clinton County

In the Matter of Shane Hatlee, Plaintiff,

against

Samantha Jo Hatlee, Defendant.



2011-1558



William T. Meconi, Esq., Plattsburgh, with and for Shane Hatlee

Anderson and Soloski, Plattsburgh (Mark E. Anderson, Esq., of counsel), with and for Samantha Jo Hatlee

Timothy J. Lawliss, J.

On June 25, 2012, the plaintiff Shane Hatlee commenced an action for divorce. On January 31, 2013, the Court conducted a trail on the only unresolved issues: child custody and child support. By separate decision this Court awarded Mrs. Hatlee custody of the parties' only child. This decision regards solely the Court's determination as to whether or not union dues paid by Mr. Hatlee should be deducted from Mr. Hatlee's gross income prior to calculating Mr. Hatlee's income for child support purposes. Mr. Hatlee is employed at Mohawk Fine Papers and pays monthly union dues to the United Steel Workers of between $60.00 and $80.00 per month depending on the number of hours Mr. Hatlee works. For reasons set forth herein, the Court finds no deduction warranted for Mr. Hatlee's union dues.

Domestic Relations Law [DRL] §240(1-b) sets forth the methodology the Court must follow to determine the non-custodial parent's child support obligation. Pursuant to DRL §240(1-b)(b)(5) income for support purposes "shall mean, but shall not be limited to, the sum of the amounts determined by the application of clauses (i), (ii), (iii), (iv), (v) and (vi) of this subparagraph reduced by the amount determined by the application of clause (vii) of this subparagraph." The delineated clause (vii) deductions are as follows: [*2]

(A) unreimbursed employee business expenses except to the extent said expenses reduce personal expenditures,

(B) alimony or maintenance actually paid to a spouse not a party to the instant action pursuant to court order or validly executed written agreement,

(C) alimony or maintenance actually paid or to be paid to a spouse that is a party to the instant action pursuant to an existing court order or contained in the order to be entered by the court, or pursuant to a validly executed written agreement, provided the order or agreement provides for a specific adjustment, in accordance with this subdivision, in the amount of child support payable upon the termination of alimony or maintenance to such spouse,

(D) child support actually paid pursuant to court order or written agreement on behalf of any child for whom the parent has a legal duty of support and who is not subject to the instant action,

(E) public assistance,

(F) supplemental security income,

(G) New York city or Yonkers income or earnings taxes actually paid, and

(H) federal insurance contributions act (FICA) taxes actually paid.

Union dues are not a specified deduction. Clearly, union dues do not fall under DRL §§240(1-b)(b)(5)(vii)(B), (C), (D), (E), (F), (G), or (H). DRL §240(1-b)(b)(5)(vii) does not provide for any additional deductions nor does it contain a catch all "other" category left to the Court's discretion. The question before the Court, therefore, is whether or not union dues qualify as a deduction under subsection (A), "unreimbursed employee business expenses except to the extent said expenses reduce personal expenditures."

After an extensive search, the Court cannot locate any Appellate authority which resolves this question and only very limited trial level authority. In Matter of a Proceeding for Support under Article 4 of the Family Court Act, Frazier v Penraat, 5 Misc 3d 1032(A), 799 NYS2d 163 [N.Y.Fam.Ct., 2004], the family court upon review of objections held, without explanation, that "[i]t was improper for the magistrate to deduct union dues from petitioner's income as this is not a recognized deduction under the Child Support Standards formula for calculating Adjusted Gross Income."

DRL §240(1-b)(b)(5)(vii)(A) does not define "unreimbursed employee business expenses" by reference to the [*3]Department of the Treasury Internal Revenue Service [IRS] criteria or by any other method. Nevertheless, the Court finds it appropriate to look to IRS regulations and publications for guidance as to how union dues are treated for tax purposes given the other references to the federal tax law in DRL § 240(1-b)(5). See, DRL § 240(1-b)(5)(i). See also, LaPorte v LaPorte, 263 AD2d 585, 693 NYS2d 666 [3 Dept, 1999]. In LaPorte, the Court held that "in calculating income, the statute (DRL § 240) provides a deduction for, inter alia, unreimbursed employee business expenses except to the extent said business expenses reduce personal expenditures' (citing DRL § 240(1-b)(b)(5)(vii)(A)) ... [h]owever, such expenses are properly deducted from parental obligations only when proven, usually by tax returns accompanied by records and receipts {citation omitted}{emphasis provided}".

The IRS defines unreimbursed employee expenses (subject to limitations) as those expenses (1) that are paid or incurred during the individual's tax year; (2) that are for carrying on the individual's trade or business of being an employee; and, (3) that are ordinary and necessary. See, IRS Publication 529, Miscellaneous Deductions [2012 Returns], page 3 [http://www.irs.gov/ publications/p529/index.html]. The IRS defines an expense as ordinary if "it is common and accepted in your trade, business, or profession" and defines an expense as necessary "if it is appropriate and helpful to your business." See, IRS Publication 529, Miscellaneous Deductions [2012 Returns], page 3 [http://www.irs.gov/publications/p529/index.html].An expense "does not have to be required to be considered necessary." See, IRS Publication 529, Miscellaneous Deductions [2012 Returns], page 3 [http://www.irs.gov/publications/p529/index.html]. Thus, union dues may be considered (subject to restrictions not relevant herein) by the IRS as unreimbursed employee expenses. See, IRS Publication 529, Miscellaneous Deductions [2012 Returns], pages 3 and 7 [http://www.irs.gov/publications/p529/index.html].

For purposes of determining whether union dues are deductible under DRL §240(1-b)(b)(5)(vii)(A), however, the Court must do more than apply the IRS criteria. To conclude that the expenses are deductible, the Court must also determine if "said expenses reduce personal expenditures." DRL §240(1-b)(b)(5)(vii)(A).

The Court cannot conclude that in all cases, without exception, that an individual's personal expenditures are never reduced by the payment of union dues. There exists an array of possible union benefits which may reduce a individual's personal expenditures. An individual, for example, may as part of their union benefits have some form of coverage for that individual's dental needs; thereby, reducing that individual's out of pocket costs for dental services. On the other hand, the Court cannot conclude that in all cases, without exception, that an individual paying union dues always has his or her personal expenditures reduced. Accordingly, the Court finds that the ability to deduct union dues for purposes of calculating an individual's income for child support purposes must be determined on a case by case basis.

In the instant matter, Mr. Hatlee is the party who benefits if union dues are deducted from his earnings for purposes of calculating his child support obligation and therefore, has the burden of proof on this issue. Mr. Hatlee offered insufficient evidence to substantiate a claim for a deduction for union [*4]dues. Most notably Mr. Hatlee did not offer any evidence as to whether or not his union dues reduced his personal expenses. Mr. Hatlee also failed to submit his tax returns to the Court for consideration. See, LaPorte v LaPorte, 263 AD2d 585, 693 NYS2d 666 [3 Dept, 1999]. See also, Winn v Baker, 2 AD3d 1169, 768 NYS2d 708 [3 Dept, 2003]. Compare, Matter of Grasso v Grasso, 90 AD3d 1672, 936 NYS2d 452 [4 Dept, 2011] (individual benefitting from deduction did file tax returns listing entertainment expenses on tax return of that individual's subchapter C corporation and other party failed to demonstrate expenses were personal in nature). Accordingly, the Court will not reduce Mr. Hatlee's income for child support purposes by the amount Mr. Hatlee pays for union dues.

Signed and Dated: June 17, 2013

E N T E R

______________________________

Hon. Timothy J. Lawliss

Acting Supreme Court Justice