TAX RETURNS A MUST FOR REDUCTION IN ALIMONY
Nevada Revised Statute 125.150(7) permits a court to modify a spouse’s alimony obligation. “upon a showing of changed circumstances.” Nevada Revised Statute 125.150(7) also provides that “in addition to any other factors the court considers relevant in determining whether to modify the order, the court shall consider whether the income of the spouse who is ordered to pay alimony, as indicated on the spouse’s federal income tax return for the preceding calendar year, has been reduced to such a level that the spouse is financially unable to pay the amount of alimony the spouse has been ordered to pay.”
After the Great Recession which began in 2007, motions for a modification of alimony flooded the courts. I such bleak economic conditions, a drastic decline in the payor spouse’s income was, for the most part, a given in these alimony proceedings. As such, the district courts often modified the alimony obligation without the formality of even seeing tax returns. In one case for example, Judge Ritchie, a family court judge in Clark County, stated that “the reason why the tax returns are listed in [NRS 125.150(7)] is because they’re a good starting point for determining income, especially for an employee.”
Family law practitioners and parties representing themselves in proper person, should take note that the Nevada Supreme Court disagrees with Judge Ritchie’s practical assessment of NRS 125.150(7). In an unpublished decision in Wilde v. Wilde, Case No. 5921, the Nevada Supreme Court held that:
“under NRS 125.150(7), when a district court is determining whether to reduce an alimony award agreed upon in a marital settlement agreement ‘the court shall consider whether the [payor spouse’s income], as indicated on the spouse’s federal income tax return for the preceding calendar year, has been reduced to such a level that the spouse is financially unable to pay the amount of alimony the spouse has been ordered to pay.’
In Wilde the Nevada Supreme Court rejected the notion that tax returns were a “starting point” and reversed Judge Ritchie’s order modifying the husband’s alimony obligation. In doing so, the Nevada Supreme Court noted that the husband’s tax return need not be formally introduced into evidence. Instead, an in camera review of the husband’s tax return would have satisfied NRS 125.150(7). In other words, parties seeking a modification of alimony need to make sure the judge at least sees their most recent tax return if they want any relief from their alimony obligation.
The Las Vegas divorce lawyers at Pecos Law Group have significant experience in alimony issues as well as other aspects of family law in Nevada. PecosLawGroup.com.