Can a dentist pay his alimony through his dental practice as if his ex-wife is an employee?

Get Legal Help Today

 Secured with SHA-256 Encryption

Can a dentist pay his alimony through his dental practice as if his ex-wife is an employee?

She has never worked in his office but he is paying the alimony in bi-monthly payroll checks. Also put her insurance as if she were an employee. Is this legal or fraud?

Asked on February 10, 2011 under Family Law, New Jersey

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It's fraud. He is defrauding the tax authorities, because he is taking her salary as a tax deduction--a deductible business expense--when in fact she's not working and its a business expense. He's also defrauding the health insurer, since he's buying insurance for her to which she is not entitled. (If he had any business partners or investors and they're not fully onboard with this, he's also defrauding them as well.) He and she both could face significant liability for  this.

There are ways to do something similar legally; for example, he could offer  her a job (with benefits) as a way to pay or partially pay her alimony; she could accept it; and they could have an agreement setting each one's rights to protect them both. Then as long as she actually is employed by the practice--in such a way that the salary she gets is more or less commensurate wiith the work she actually does--that would be legal. He could also hire her to do freelance work (e.g. marketing, customer service, sales, etc.) as a way to satisfy some or all alimony, and again, as long as its mutually agreed to and above  board, that's fine. It's doing things on the sly without having her actually work that creates liablity.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption