In an Illinois divorce, the parties’ incomes must be verified. To ensure that a spouse is being paid what they claim they are being paid, ask to see what money they are actually collecting and what money they tell the IRS they are collecting (not often the same thing).
By comparing bank statements to tax returns and the tax return’s supporting documents (W-2s, K1s, 1099s, etc), the income of a spouse in an Illinois divorce can be verified and used to determine child support and/or maintenance.
Even with all of this proof of their income, a divorce litigant may not agree with a bank statement and/or tax returns being the measurement of their income. If that is the case, the only way to get those bank statements and tax returns in front of a judge is to admit them into evidence…which can be tricky.
Why Are Tax Returns And Bank Statements Important In An Illinois Divorce?
Tax returns and bank statements are two ways to determine what someone’s income is an Illinois divorce. The income of both parties is what determines support during and after an Illinois divorce.
Child support in Illinois calculated “by taking the following steps:
(A) determine each parent’s monthly net income;
(B) add the parents’ monthly net incomes together to determine the combined monthly net income of the parents;
(C) select the corresponding appropriate amount from the schedule of basic child support obligations based on the parties’ combined monthly net income and number of children of the parties; and
(D) calculate each parent’s percentage share of the basic child support obligation.” 750 ILCS 5/505(a)(1.5)
Maintenance (formerly known as alimony) is “calculated by taking 33 1/3% of the payor’s net annual income minus 25% of the payee’s net annual income. The amount calculated as maintenance, however, when added to the net income of the payee, shall not result in the payee receiving an amount that is in excess of 40% of the combined net income of the parties.” 750 ILCS 5/504(b-1)(A)(1)
Either party will be tempted to reflect a lower net income in order to decrease or increase their support, respectively.
Tax returns reflect the net income after taxes. “[N]et income” means gross income minus either the standardized tax amount” 750 ILCS 5050(a)(3)(B)
Bank statements show the actual money that arrives in the person’s possession, their gross income. “[G]ross income” means the total of all income from all sources” 750 ILCS 5050(a)(3)(A)
Comparing the gross deposits in the bank accounts with gross wages on the tax returns will tell you if the other person’s representations of their income are accurate.
Furthermore, whatever is in the bank statements, if deposited after the marriage, is presumed to be marital property and thus divisible in an Illinois divorce.
“[F]unds deposited into the checking account following the parties’ marriage are marital property, as renumeration in whatever form to a spouse during a marriage is considered marital property” In re Marriage of Tatham, 173 Ill. App. 3d 1072, 1091 (1988)
Either party to the divorce may not like the income that their bank statements and tax returns show. In such a case, they may try to keep these fundamental documents out of evidence…and they can.
How To Get Bank Statements And Tax Returns Into Evidence In An Illinois Divorce
It is always the duty of the person trying to get evidence considered by the judge to properly admit that evidence. Very little evidence is automatically admitted…even if the proposed evidence are a litigant’s own bank statements and tax returns.
Just because a divorce litigant has produced the documents does not automatically mean the document is agreed to be authentic and, thus, automatically admissible at a hearing or trial.
“Under Illinois law, however, the production of documents in response to discovery requests does not, in and of itself, authenticate those documents so as to permit the use of the documents at trial.” Mueller Industries, Inc. v. Berkman, 927 NE 2d 794 – Ill: Appellate Court, 2nd Dist. 2010
Bank statements and tax returns, while often tendered directly by the opposing party, are hearsay.
“”Hearsay” is a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted.” “Ill. R. Evid. 801(c)
Someone else, a bank or an accountant, prepared the bank statement and the tax returns. They are the only person that can properly authenticate and testify regarding the documents…otherwise, the other party can object to the entry of the bank statements or tax returns as hearsay.
“Hearsay is not admissible except as provided by these rules, by other rules prescribed by the Supreme Court, or by statute as provided in Rule 101.” Ill. R. Evid. 802
Bank statements and tax returns are reliable on their face (in my opinion) but they are still subject to the rules of evidence. So, without an agreement to admit the documents, the party requesting to admit the bank statements and/or tax returns will need an exception to the hearsay rule.
Bank statements and tax returns are both made in the regular course of business by the bank or the tax preparer and are, thus, business records. Business records are inherently reliable and, therefore, are a self-authenticating exception to the hearsay rule. Self-authenticating documents merely need someone to certify that they were made in the regular course of business.
“The following are not excluded by the hearsay rule…[a] memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity, and if it was the regular practice of that business activity to make the memorandum, report, record or data compilation, all as shown by the testimony of the custodian or other qualified witness, or by certification that complies with Rule 902(11)” Ill. R. Evid. 803(6)
“The original or a duplicate of a record of regularly conducted activity that would be admissible under Rule 803(6) if accompanied by a written certification of its custodian or other qualified person that the record(A) was made at or near the time of the occurrence of the matters set forth by, or from information transmitted by, a person with knowledge of these matters;(B) was kept in the course of the regularly conducted activity; and(C) was made by the regularly conducted activity as a regular practice.” Ill. R. Evid. 902(11)
Without agreement, you’re going to have to ask the bank or the tax preparer via subpoena for copies of the documents accompanied by the following certification, ready for signature.
BUSINESS RECORDS CERTIFICATE OF AUTHENTICITY
I, ___________________________________________________, am employed by ___________________________________________________________________________ ___________________________________________________________________________. (Name, address, phone number and email address of the business entity) My official title is ____________________________________________________. I am familiar with the type of documents and records received, created, and relied upon by _______________________________________________________________ (name of business entity) in the ordinary course of its business. List Documents I further certify that: A) such records were made, at or near the time of the occurrence of the matters set forth, by (or from information transmitted by) a person with knowledge of those matters; B) such records were kept in the course of a regularly conducted business activity: C) the business activity made such records as a regular practice; and D) if such record is not an original, such record is a duplicate of the original. I certify under penalty of perjury that the foregoing is true and correct.
In lieu of this complicated and inevitable theater of business records certification, you could just ask the opposing side to agree that the bank statements and/or tax returns do not require authentication.
An opposing side that refuses to stipulate to the authenticity of a bank statement or tax return without some concern regarding the veracity bank statements or the tax returns is (to be polite) a jerk. The obstinate bank statement or tax return provider will likely file a motion in limine in advance of trial to keep those exhibits out of evidence.
If a stipulation isn’t offered and you want to make the opposing party look like a jerk for not certifying/knowing/caring if the documents they are tendering are authentic…serve them with a request to admit as to their authenticity. But, a request for admission of fact or genuineness of documents must be served at least 28 days before trial…and, even then, what if they deny? You still need to authenticate the documents (but they would still look like a jerk)
If it is the day before trial, and you do not have bank statements and/or tax returns that are properly certified or whose admissibility is agreed to, you may still have options.
Bank statements and tax returns are needed to determine maintenance and child support. Maintenance and child support can (on a temporary basis) be determined without an evidentiary hearing and, thus, do not need evidence which must be formally admitted.
“Issues concerning temporary maintenance or temporary support of a child entitled to support shall be dealt with on a summary basis based on allocated parenting time, financial affidavits, tax returns, pay stubs, banking statements, and other relevant documentation, except an evidentiary hearing may be held upon a showing of good cause.” 750 ILCS 5/501(a)(3)
Furthermore, bank statements and tax returns are often attached to the financial affidavit.
The Illinois financial affidavit for family and divorce cases says “I attached the most recent copies of the following documents (Check all that apply. You must attach these documents if you have or can get them.) a. pay stubs or other proof of income b. income tax returns (including K-1, W-2, 1099, and all schedules.) c. bank statements”
The party who prepared their own financial affidavit could be asked to testify to the documents that they used to prepare that financial affidavit.
Finally, a party who produced tax return and/or bank statements might be said to be keeping those tax returns and/or bank statements during the course of their own business and, thus, could certify them as business records themselves.
“[I]t makes no difference whether the records are those of a party or of a third person authorized by the business to generate the record on the business’s behalf…Rule 236 requires only that the party tendering the record satisfy the foundational requirements that (1) the record was made in the regular course of business and (2) at or near the time of the event or occurrence.” Kimble v. Earle M. Jorgenson Co., 358 Ill. App. 3d 400, 414 (Ill. App. Ct. 2005)
“Any writing or record, whether in the form of any entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence, or event, shall be admissible as evidence of the act, transaction, occurrence, or event, if made in the regular course of any business, and if it was the regular course of the business to make such a memorandum or record at the time of such an act, transaction, occurrence, or event or within a reasonable time thereafter. All other circumstances of the making of the writing or record, including lack of personal knowledge by the entrant or maker, may be shown to affect its weight, but shall not affect its admissibility. The term “business,” as used in this rule, includes business, profession, occupation, and calling of every kind.” Ill. Sup. Ct. R. 236 (emphasis mine)
If you have a job, a profession or even a hobby, you can certify documents that you use in your regular course of business for that job, profession or hobby. But, you may have a hard time satisfying the first prong in adequately describing “how the record was made in the course of business.”
Perhaps simple testimony such as “I press the print statements button on Chase.com and these records come out of my printer” is sufficient to satisfy a business records certification?
Illinois divorce law is not complicated (in my opinion) but it is extremely broad. You may have to know how parenting time is determined by the best interest of a child and, at the same time, you may have to know how to properly value and divide a closely held corporation. Add a byzantine layer of evidence law on top of that…and you’ve got a lot of balls in the air. If you’re looking for someone who can juggle all these balls in and out of an Illinois (or Florida) courtroom, contact my Chicago, Illinois family law firm to speak with an experienced Illinois divorce attorney.