No. 01-715 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

 

2002 MT 

PATRICIA MARIE ALBRECHT, 

 Petitioner and Appellee, 

 v. 

KEITH VINCENT ALBRECHT, 

 Respondent and Appellant. 

APPEAL FROM: District Court of the Eighteenth Judicial District, 

 In and for the County of Gallatin, 

 The Honorable Thomas A. Olson, Judge presiding. 

COUNSEL OF RECORD: 

 For Appellant: 

 Gregory O. Morgan, Gregory O. Morgan, P.C., Bozeman, Montana 

 For Respondent: 

 Kirsten Mull Core, Kirsten Mull Core, P.C., Bozeman, Montana 

Submitted on Briefs: March 21, 2002 

Decided: October 10, 2002 

Filed: 

 __________________________________________ 

 Clerk
Justice Terry N. Trieweiler delivered the Opinion of the Court. 

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1¶ The Petitioner, Patricia Marie Albrecht, filed a petition for dissolution of her 

marriage to Respondent, Keith Vincent Albrecht, in the District Court for the Eighteenth 

Judicial District in Gallatin County. Following trial the District Court found the marriage 

to be irretrievably broken, awarded custody of the parties' three minor children to Patricia 

and ordered that Keith pay child support in the total amount of $2,412.00 per month. 

Keith appeals the District Court’s child support award. We affirm in part, reverse in part 

and remand to the District Court for further proceedings consistent with this Opinion. 

2¶ The issue presented on appeal is whether the District Court erroneously calculated 

Keith’s child support obligation? 

FACTUAL BACKGROUND 

3¶ Keith and Patricia Albrecht were married on February 26, 1983. They had three 

children during their marriage. Patricia filed a petition for dissolution of their marriage on 

December 22, 1999. The District Court issued its Findings of Fact, Conclusions of Law, 

and Decree of Dissolution of Marriage on August 29, 2001. In the Decree the court 

ordered that Keith pay child support in the amount of $2,412.00 per month for the three 

children. The District Court relied upon the testimony of Patricia’s expert, Mr. Nicholas 

Bourdeau, and adopted his final child support calculation. 

4¶ Mr. Bourdeau arrived at Keith’s child support obligation by first determining that 

Keith’s income for 1999 was $93,987.00 from full-time self-employment as a roofing 

contractor and excavator and from house construction done in his spare time. Keith, 

however, reported an income of $37,747.00 from these sources in his 1999 Amended 
4 

U.S. Individual Income Tax Return. Mr. Jan Staker, Keith’s CPA, testified that Keith’s 

average income from 1995-1999 was $26,613.00. Mr. Staker’s knowledge of Keith’s 

income and expenses was based on the information given to him by Keith, and was not 

based on an actual review of Keith’s business records. The parties stipulated that Keith’s 

gross receipts for 1999 were approximately $217,244.00. 

5¶ The District Court ignored Keith’s income tax returns as evidence of income 

based on Mr. Bourdeau’s testimony that he believed the returns were unreliable for child 

support purposes. It was Mr. Bourdeau’s impression that Keith’s tax returns were 

“aggressive” and potentially “overreaching.” Consequently, Mr. Bourdeau did his own 

income and business expense analysis by reconstructing Keith’s business records. The 

difficulty and expense of auditing the business records led the District Court to the 

conclusion that averaging income for a period of three preceding years to determine 

income was not necessary. 

6¶ Therefore, the District Court input $93,987.00 for self-employment income on 

Line 1 of the Child Support Worksheet A (Worksheet A). However, for the purpose of 

calculating federal income tax, state income tax and social security payments for 

allowable deductions on Line 2 of Worksheet A, the District Court averaged the actual 

taxes and Social Security payments made from the four preceding years. The average of 

those deductions was $1,649.00. This resulted in $92,338.00 of income on Line 3 of 

Worksheet A. The question on appeal is whether a child support obligation based on 

income calculated in this manner is correct. 
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STANDARD OF REVIEW 

7¶ The standard of review of a district court’s award of child support is whether the 

court abused its discretion. In re Marriage of Craib (1994), 266 Mont. 483, 490, 880 

P.2d 1379, 1384. In deciding whether a district court abused its discretion, we determine 

whether “the trial court acted arbitrarily without employment of conscientious judgment 

or exceeded the bounds of reason resulting in substantial injustice.” In re Marriage of 

Kovarik, 1998 MT 33, ¶ 21, 287 Mont. 350, ¶ 21, 954 P.2d 1147, ¶ 21 (citing In re 

Marriage of Wessel (1986), 220 Mont. 326, 333, 715 P.2d 45, 50). This court has stated 

that “a district court must apply its discretion in a realistic manner, taking into account 

the actual situation of the parties.” In re Marriage of Noel (1994), 265 Mont. 249, 252, 

875 P.2d 358, 359. 

8¶ A district court’s findings of fact are reviewed to determine whether they are 

clearly erroneous. In re Marriage of Stufft (1997), 286 Mont. 239, 250-51, 950 P.2d 

1373, 1379 (citing Interstate Production Credit v. DeSaye (1991), 250 Mont. 320, 322, 

820 P.2d 1285, 1286). To determine whether they are clearly erroneous, we consider: 1) 

whether the findings are supported by substantial evidence; 2) if the findings are 

supported by substantial evidence, whether the district court misapprehended the effect 

of the evidence; and 3) where the district court’s findings are supported by substantial 

evidence, and the evidence has not been misapprehended, whether “review of the record 

leaves the court with the definite and firm conviction that a mistake has been committed.” 

Interstate Production Credit, 250 Mont. at 323, 820 P.2d at 1287 (citing United States v. 
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United States Gypsum Co. (1948), 33 U.S. 364, 68 S.Ct. 525, 92 L.Ed. 746). The 

standard of review of a district court’s conclusions of law is whether the district court’s 

conclusions are correct. In re Marriage of Brown (1994), 263 Mont. 184, 187, 867 P.2d 

381, 382 (citing Burris v. Burris (1993), 258 Mont. 265, 269, 852 P.2d 616, 619). 

DISCUSSION 

9¶ Keith assigns error to several of the District Court’s findings and in turn to the 

methodology employed by Mr Bourdeau. We have classified his criticisms as follows. 

 A. Failure to consider income from years other than 1999. 

10¶ Keith contends that the District Court erred by calculating his actual income for 

child support purposes based on his income for 1999 alone, rather than taking a threeyear average as required by law. He alleges this error resulted in a skewed and inaccurate 

portrayal of his income. 

11¶ In determining child support obligations, a district court must follow the Child 

Support Guidelines (Guidelines) unless clear and convincing evidence is produced 

demonstrating that the application of the standards and guidelines is unjust to the child or 

to any of the parties, or is inappropriate in that particular case. Section 40-4-204(3)(a), 

MCA; See In re Marriage of Albinger, 2002 MT 104, ¶ 12, 47 P.3d 820, ¶ 12, 309 Mont. 

437, ¶ 12. The Instructions for Completing Child Support Worksheets provide that 

determination of the income for a self-employed parent usually requires an average of at 

least three years of the net income from Schedule C of that parent’s income tax returns. 
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12¶ This Court has recommended consideration of at least two years of income taxes 

when a district court is determining gross income. In re Marriage of Jacobson (1992), 

251 Mont. 394, 399, 825 P.2d 561, 565. Furthermore, Rule 37.62.108(3)(a), ARM, 

provides that income should be annualized to avoid the possibility of skewed application 

of the Guidelines based on temporary or seasonal conditions. The period over which 

income is averaged should be sufficient to accurately reflect the parent’s earning ability. 

Rule 37.62.108(3)(a), ARM. While Worksheet A does not mandate calculating income 

using a three-year average, the Guidelines and our cases create a strong preference for 

averaging income. Finally, a district court must be realistic and take the actual situation 

of the parties into account when calculating child support obligations. In re Marriage of 

Noel, 265 Mont. at 252, 875 P.2d at 359. The end sought is equity and accuracy in 

determining income of the party charged with child support obligations, while serving the 

best interests of the child. It would serve no one’s best interests to attribute unrealistic 

income to a parent. If we expect a parent to meet both his needs and the needs of the 

children, child support calculations must be realistic. 

13¶ Patricia cites two cases in which this Court affirmed a district court’s award of 

child support based upon one year’s income. In re Marriage of Jacobson, 251 Mont. at 

399, 825 P.2d at 565; In re Marriage of Nash (1992), 254 Mont. 231, 235-36, 836 P.2d 

598, 600-01. While we did not require evidence of income from more than one year in 

either case, the cited cases are inapplicable due to the factual differences from this case. 

In both Jacobson and Nash, the obligated parties were employees receiving wages rather 
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than self-employed individuals. In re Marriage of Nash, 254 Mont. at 233, 836 P.2d at 

600; In re Marriage of Jacobsen, 251 Mont. at 399, 825 P.2d at 565. The preference for 

a three-year average on net income expressed in Worksheet A applies to self-employed 

individuals who do not receive income in the form of wages or a salary. A salaried 

employee or wage earner’s income can be more easily ascertained by reviewing one year 

of income because, absent a foreseeable promotion, salary or wages can be presumed to 

remain consistent or predictable over a period of time. However, self-employment is not 

as predictable. Self-employed business owners experience fluctuations in profits from 

year to year. Therefore, it is necessary to consider the business history to fairly and 

accurately determine income. 

14¶ We conclude that the District Court abused its discretion when it based 

determination of Keith’s income on only what he earned in 1999. Income for a selfemployed parent should be calculated based on a three-year average of that parent’s net 

earnings. A district court is not permitted to deviate from the Guidelines absent clear and 

convincing evidence that following the Guidelines would be unjust to the child or to any 

of the parties, or is inappropriate in that particular case. The testimony of Mr. Bourdeau 

fails to provide clear and convincing evidence that applying the three-year average of net 

earnings from Schedule C would result in injustice. Mr. Bourdeau’s testimony does not 

provide specific evidence that the cost of auditing previous years would be prohibitive 

and he could only speculate about inaccuracies of the previous tax years. Accordingly, 
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we conclude the District Court abused its discretion by deviating from the Guidelines’ 

preference for a three-year average of net income for a self-employed parent. 

 B. Income tax returns. 

15¶ Keith argues that the court erred when it rejected his 1999 income tax returns as 

evidence of his income. He cites the following language from Rule 37.62.108(2), ARM: 

“Income of the parents must be documented. This may include pay stubs, employer 

statements, income tax returns, profit and loss statements.” Keith further contends that 

the court erred when it failed to consider his tax returns for previous years. 

16¶ The District Court disregarded the 1999 tax return submitted by Keith based upon 

Mr. Bourdeau’s testimony that tax returns are inferior evidence of income for child 

support purposes due to the tendency of taxpayers to minimize income to avoid tax 

liability. He further testified that income calculations for child support purposes attempt 

to look at the disposable income of the parties and determine the standard of living and 

income accordingly. 

17¶ In concluding whether the District Court erred when it disregarded Keith’s income 

tax returns, Rule 37.62.108(2), ARM, provides little guidance. While the rule mandates 

income verification, and income tax returns are referred to as one form of income 

verification, they are not the exclusive method. The income with which a court is 

concerned for child support purposes is a parent’s disposable income rather than taxable 

income. In re Marriage of Wersland (1991), 249 Mont. 169, 172, 814 P.2d 991, 993; In 

re Marriage of Sullivan (1990), 243 Mont. 292, 296, 794 P.2d 687, 689. 
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18¶ Substantial evidence was produced at trial that Mr. Bourdeau conducted an 

extensive review of Keith’s records and completely reconstructed his income based upon 

that review. Mr. Bourdeau testified that his review of Keith’s records indicated they were 

unreliable for child support purposes due to the aggressive manner in which expenses 

were deducted and the commingling of personal and business expenses. We conclude that 

the District Court was not required to accept Keith’s income tax returns as verification of 

his income and further conclude that the District Court did not err when it found that the 

review performed by Mr. Bourdeau resulted in a more reliable estimate of Keith’s income 

than the submitted tax returns. 

 C. Expense calculation. 

19¶ Keith contends that the District Court erred by rejecting business expenses that he 

claimed in his 1999 tax returns. Keith argues that the similarity in the language used by 

the Guidelines and IRS Regulations suggest that deductions for tax purposes are the same 

as deductions for child support purposes. Patricia claims there was no error because 

expenses for income taxes may differ from income and expenses for child support 

purposes. 

20¶ Keith testified that certain travel expenses were not considered by the District 

Court in its calculation of income. He referred generally to credit card receipts from 1999 

as documentation of travel expenses incurred while looking for excavating equipment. 

Keith also claimed that expenses such as advertising, dump fees, vehicle expenses and 

office expenses were not considered by the court. 
21¶ The District Court found that the business expenses claimed by Keith were not 

legitimate. Furthermore, testimony given at trial by Mr. Bourdeau convinced the court 

that the expenses claimed for tax purposes were not properly documented and therefore 

not permitted pursuant to the Guidelines. 

 

22¶ The District Court found substantial commingling of personal and business 

expenses in Keith’s records. The separation of personal and business expenses accounts 

in part for the difference in the court’s expense figures and Keith’s expense figures. The 

court concluded that business expenses for tax purposes are not necessarily permitted for 

child support purposes which was supported by testimony given by Mr. Bourdeau at trial: 

A: See, there’s a difference between tax return income and income for child 

support. 

 . . . . 

A: [W]e are going to allow business expenses but only expenses that are 

necessary and reasonable to the operation and generation of the income of 

the business. 

 TR page 20, lines 9-11; TR page 21, lines 8-11. 

23¶ Actual income includes “economic benefit from whatever source derived.” Rule 

37.62.106(2)(a), ARM. Rule 37.62.106(2)(b), ARM, provides that when determining 

actual income for the purposes of child support, reasonable “ordinary and necessary 

expenses” required for the production of income may be deducted from the gross receipts 

of a parent who receives income or benefits as the result of an ownership interest in a 

business. Business expenses for purposes of calculating child support do not include 

personal expenses or expenses not necessary for the production of income. Rule 

37.62.106(2)(b), ARM. Furthermore, reimbursement allowances for actual employment 

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expenses may only be considered to the extent they have been documented. Rule 

37.62.106(2)(e), ARM. According to Mr. Bourdeau’s interpretation, which was adopted 

by the court and not raised on appeal, Rule 37.62.106(2)(e), ARM, requires a selfemployed parent to provide documentation to prove expenses are legitimate. 

24¶ The Guidelines’ rule for expense deductions mirrors IRS Reg. § 1.162(a), which 

provides that a deduction for all “ordinary and necessary expenses” incurred while 

carrying on a trade or business is permitted. The federal tax regulations burden the 

taxpayer to demonstrate that claimed expenses are necessary and legitimate. 26 C.F.R. § 

162.17(d)(2). Expenses may be estimated through secondary sources where the records 

are incomplete: 

[A] taxpayer might establish the he was in travel status a certain number of 

days but that it was impractical for him to establish the details of all his 

various items for travel expense. In such a case rail fares or plane fares can 

usually be ascertained with exactness and automobile costs approximated 

on the basis of mileage covered. A reasonable approximation of meals and 

lodging might be based upon receipted hotel bills . . . since detailed records 

of incidental items are not required, deductions for these items may be 

based upon a reasonable approximation. In cases where a taxpayer is called 

upon to substantiate expense account information, the burden is on the 

taxpayer to establish that the amounts claimed as a deduction are 

reasonably accurate and constitute ordinary and necessary business expense 

paid or incurred by him in connection with his trade or business. 

 26 C.F.R. § 162.17(d)(3). 

25¶ 

Keith alleges that the similarities in the language require a court to permit the expenses 

claimed for tax purposes as expenses for child support purposes as well. We agree that 

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the categories and types of expenses permitted by the tax code and the Guidelines are 

similar. However, a district court is not required to accept expenses at face value simply 

because they were claimed on tax returns when calculating income for child support. In 

re Marriage of Sullivan, 243 Mont. at 296, 794 P.2d at 689. Disposable income and not 

taxable income is the focus of inquiry for child support purposes. In re Marriage of 

Murphy (1994), 268 Mont. 1, 6, 885 P.2d 440, 443. A district court has broad discretion 

to determine whether a parent’s claimed business expenses are reasonable for purposes of 

calculating child support. In re Marriage of Chiovaro (1990), 247 Mont. 185, 192, 805 

P.2d 575, 579. 

26¶ Based on our review of the record, we conclude that with one exception the 

District Court did not abuse its discretion when it decided which of Keith’s claimed 

expenses were deductible and that its findings with regard to expenses were not clearly 

erroneous. However, based upon our review of Petitioner’s Exhibit P-2 and Mr. 

Bourdeau’s audit, we find no evidence to indicate that advertising and dump fees were 

taken into account. Keith claimed a total of $741.00 in advertising expenses and $503.15 

in dump fees. We conclude that the District Court abused its discretion when it did not 

consider advertising and dump expenses claimed by Keith as business expenses. 

 D. House construction. 

27¶ Keith contends that the court erred when it imputed income for the home he built 

at 524 East Granite, Bozeman, Montana. In calculating income, Mr. Bourdeau included 

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profits from houses constructed and sold as "spec" homes by Keith from 1995-1999. The 

average yearly income from the building and selling of "spec" homes was arrived at by 

adding the profit from five houses that were sold between 1995 and 1999 along with the 

estimated profit from the family home at 524 East Granite, and dividing the profit by the 

five years of operation. The five-year average of $37,594.00 was added to the income 

from Keith’s other operations to arrive at his total income. The profit from each house 

was determined by having Patricia review Keith’s house construction records. 

28¶ Keith challenges the $61,417.00 estimated profit from the sale of 524 East Granite 

that the court included in the five-year average of profits on the grounds that the house 

has not been sold, and therefore he received no economic benefit which would meet the 

Guidelines’ definition of actual income. Mr. Bourdeau testified that the $61,417.00 is 

representative of what Keith is capable of earning, even if it has not actually been sold. 

29¶ Both parties agree that the house has not sold and at this time is not on the market. 

Furthermore, there is no evidence to suggest that the house could have been sold and 

Keith refrained from doing so. We conclude that Keith has received no economic benefit 

from the 524 East Granite house. 

30¶ Next, we must determine whether the court impermissibly imputed income. Rule 

37.62.106, ARM, provides: 

(1) Income for child support includes actual income, imputed income, or 

any combination thereof which fairly reflects a parent’s resources available 

for child support. 

14 
 . . . . 

(6) ‘Imputed Income’ means income not actually earned by a parent, but 

which will be attributed to the parent based on: (a) the parent's earning 

potential if employed full time; (b) the parent's recent work history . . . . 

(7) Income should be imputed whenever a parent: (a) is unemployed; (b) is 

underemployed; (c) fails to produce sufficient proof of income; (d) has an 

unknown employment status; or (e) is a full time student . . . . 

31¶ 

Based upon the factual record and the Guidelines, we conclude that the District Court 

erred by imputing income for the home at 524 East Granite. None of the conditions 

necessary for imputing income exist. The record established that Keith is working fulltime for State Construction and has purchased property for “spec” home construction in 

the future. Imputed income is not appropriate for a parent who is working full-time and 

to the full extent of his earning capacity. The calculations submitted to the court were 

intended to represent Keith’s income from house construction. Accordingly, a profit 

analysis for each house was performed to arrive at a five-year average of income from 

construction. The facts indicate that Keith was capable of selling five "spec" homes in a 

five-year period. Including an estimate of what the sixth home at 524 East Granite will 

sell for adds income for which Keith has received no economic benefit. Keith’s income 

from house construction is fairly represented by the average of the profits from the five 

homes actually sold from which Keith received an economic benefit. 

15 
32¶ Patricia argues the Guidelines allow for the projection of income based upon what 

is likely to happen in the future. While she is correct that the Guidelines allow for 

income projection, her argument is based upon misapplication of the law. Rule 

37.62.108(3), ARM, provides in part: 

[I]ncome for child support and expenses should be annualized to avoid the 

possibility of skewed application of the guidelines based on temporary or 

seasonal conditions. Income and expense may be annualized using one of 

the two following methods: (a) seasonal or fluctuating income may be 

averaged over a period sufficient to accurately reflect the parent’s earning 

ability; or (b) current income or expenses may be projected when a recent 

increase or decrease in income is expected to continue for the foreseeable 

future. 

33¶ 

Review of the record demonstrates that the court chose to annualize Keith’s house 

construction by averaging the income from Keith’s house construction for the five years 

he operated the business. However, no evidence indicates the need to project income as 

suggested in Patricia's brief. According to the Guidelines, income projection is 

appropriate where a change in income is expected in the future and fairness to the 

children, or the parent, necessitates taking the change into account. In the instant case, 

there is no evidence to suggest that Keith's house construction business will change in the 

foreseeable future. Absent evidence of a foreseeable change, this argument is 

unpersuasive. 

34¶ Accordingly, we conclude that the District Court erred when it attributed income 

to Keith for the future sale of the home at 524 East Granite. 

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 E. Allowable deductions. 

35¶ Keith contends that the District Court erred by manipulating the amount of federal 

tax, state tax, and Social Security payments deductible on Line 2 of Worksheet A. The 

program used by the court to reach Keith's child support obligation takes into account an 

estimated amount of tax and deducts it from the total income entered in Line 1 of 

Worksheet A. Mr. Bourdeau entered the average taxes paid by Keith over the four 

preceding years rather than using the taxes he would pay on income of $93,987.00. 

36¶ As discussed above, the District Court ascertained that Keith’s actual income was 

$93,987.00 based upon an audit of Keith's business records from 1999. The court did not 

base its actual income upon an average of three years consistent with the Guidelines' 

preference. However, when determining the deductions available to Keith for taxes, the 

court chose to average the income tax due for Keith in 1995, 1996, 1997, and 1998. The 

District Court found tax returns for these years applicable for Line 2 of Worksheet A 

despite its finding that they were inaccurate for income purposes. Mr. Bourdeau entered 

the average of taxes paid rather than the taxes due on $93,987.00 because he felt it more 

accurately reflected disposable income for child support purposes. Keith paid an average 

of $1,596.00 in federal taxes, $53.00 in state taxes and nothing for Social Security during 

the years considered by the court. The total allowable deductions based upon these 

numbers is $1,649.00 for an income of $93,987.00. After deductions, Keith’s yearly 

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income on Line 3 of Worksheet A is $92,338.00. His child support obligation based 

upon these calculations is $2,412.00. 

37¶ Keith argues that the court erred by using the four-year average of actual taxes 

paid in calculating his allowable deductions. Specifically, he contends that the 

Guidelines allow deductions for the federal tax, state tax and Social Security payments 

that he would be required to pay on income of $93,987.00. The allowable deductions on 

a $93,987.00 yearly income are $17,144.00 for federal income tax, $4,660.00 for state 

income tax and $11,966.00 for Social Security payments. The total allowable deductions 

according to Keith’s calculations are $33,770.00, giving Keith an income of $60,217.00 

on Line 3 of Worksheet A. Keith maintains his child support payment will be reduced by 

$1,000.00 per month if the taxes due on $93.987.00 are used on Line 2 of Worksheet A. 

38¶ We are asked to determine whether a district court can use the average taxes paid 

from previous years for determining allowable tax deductions when it did not rely upon 

those tax returns to determine income, and relied upon only one year to determine 

income. Rule 37.62.110, ARM, provides: 

18 
 allowable deductions from income include: 

 . . . . 

 (d) the actual income tax liability based on tax returns. If no other 

information is available, use the tax tables which show the amount of 

withholding for a single person with one exemption; (e) the actual social 

security paid . . . . 

39¶ 

The Instructions for Completing Child Support Worksheets provide for the allowable 

deductions on Line 2. With respect to federal and state income tax deductions, the 

Instructions provide that the total amount of tax due from tax returns, the average tax 

liability if income was averaged, or the amount of tax due according to state and federal 

rules if tax returns are not available, may be deducted. The amount of Social Security 

withheld from gross pay according to the parent’s W-2 forms should be entered if 

available, otherwise the amount due should be calculated based upon the federal 

regulations. 

40¶ According to the Instructions, taxes for the purposes of allowable deductions may 

only be determined by using an average of taxes from previous years where the court 

averaged that parent’s income in calculating the income figures used in Line 1. The court 

did not average Keith’s income. Therefore, it was improper for the court to use the 

average tax liability from previous years on Line 2 of Worksheet A. 

41¶ Next we address whether it was proper for the court to determine tax liability for 

Line 2 based upon reported taxes rather than the amount due on the court’s income 

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figures according to IRS Circular E. The Guidelines and legal precedent on the issue of 

child support emphasize one fundamental principle. Child support should be sufficient to 

maintain the standard of living a child enjoyed before dissolution after his or her parents 

have separated. Rule 37.62.101(2), ARM. This is determined by reviewing each parent’s 

ability to support the children of the dissolved marriage based upon that parent’s 

disposable income. In re Marriage of Murphy, 268 Mont. at 6, 885 P.2d at 443. In the 

present case, the court has determined Keith’s disposable income to be considerably 

greater than the income he reported and paid taxes on in 1999. This Court has 

subsequently affirmed the District Court’s calculations for 1999 using Mr. Bourdeau’s 

audit with some exceptions. To allow a deduction for an expense that was not paid 

would result in an inaccurate picture of disposable income. Keith’s disposable income, 

as determined by the District Court, is his actual income less taxes and Social Security 

due according to tax returns. In this case, Keith only paid taxes on $37,747.00 of income. 

Therefore, it would be inappropriate to allow him to deduct over $30,000.00 of expenses 

he did not incur. We conclude that the District Court did not abuse its discretion when it 

relied on the actual tax paid during the years in question. 

42¶ The final determination of allowable deductions will depend on those years the 

District Court relies on to determine the average of Keith’s actual income. Only the taxes 

and Social Security payments made during those years should be averaged to arrive at the 

deductions allowed on Line 2. 

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 F. Margin of error. 

43¶ Keith argues that the court misapplied the law when it held that Mr. Bourdeau 

allowed a $33,000.00 margin of error in Keith’s favor when determining income. Mr. 

Bourdeau testified that business losses are not permitted by the Guidelines and that he 

technically excluded $33,559.00 of income that could have been attributed to Keith 

when he subtracted losses in that amount from Keith’s income. Though it is not perfectly 

clear how this impacted the court’s findings, we resolve the issue to preclude further 

confusion on remand. 

44¶ Neither Mr. Bourdeau nor the District Court demonstrated where the Guidelines 

provide that business losses are not to be included in income calculations. After 

independent review of the Guidelines, we find no rule or regulation to support this 

conclusion. The only mention of excluding business losses is found in Rule 37.62.111, 

ARM, which provides: “Deductions which are not allowable under the rules include: . . . 

(b) a net loss in the operation of a business or farm used to offset other income. . . .” This 

rule prevents a parent from counting business losses twice. It does not prohibit 

consideration of business losses when determining income. We therefore conclude that 

the District Court erred when it held that Mr. Bourdeau included a $33,000.00 margin of 

error favoring Keith in his calculations. 

 G. Biased expert opinion and calculations. 

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45¶ Keith’s argument concerning the biased nature of Mr. Bourdeau’s child support 

calculations is not clearly articulated. He maintains that the child support calculation was 

biased because Mr. Bourdeau did not adequately involve him in the review process. 

Additionally, he contends that the District Court erred by relying upon Mr. Bourdeau’s 

testimony because Mr. Bourdeau allowed Patricia to aid him in reviewing Keith’s records 

and expense determinations. 

46¶ The record demonstrates that Patricia conducted the bookkeeping for Keith’s 

operations and was familiar with his business records. Mr. Bourdeau testified that he 

gave Patricia specific instructions for auditing the records and reviewed her work and the 

records to insure she was complying with his instructions. Furthermore, while Keith 

contested the expense calculations reached by Mr. Bourdeau, he produced no evidence 

that his expenses were legitimate, that Mr. Bourdeau’s determinations were incorrect, or 

that Patricia’s involvement in reviewing Keith’s records actually prejudiced the child 

support calculation. 

47¶ In non-jury trials, the credibility of the witnesses and the weight given to their 

testimony and evidence presented at trial is a matter left to the discretion of the district 

court. In re Marriage of Kovarik, ¶ 30 (citing Keebler v. Harding (1991), 247 Mont. 518, 

523, 807 P.2d 1354, 1357); Pankratz v. Teske, 2002 MT 112, ¶ 18, 309 Mont. 499, ¶ 18, 

48 P.3d 30, ¶ 18. We conclude that the District Court did not abuse its discretion when it 

22 
found that the audit conducted by Mr. Bourdeau was reliable in spite of the fact that 

Patricia was involved in reviewing Keith’s business records. 

48¶ We affirm in part, reverse in part, and remand to the District Court for further 

findings regarding Keith’s child support obligations consistent with this opinion. 

 

 ________________________________________ 

 Justice 

We Concur: 

___________________________________ 

___________________________________ 

___________________________________ 

___________________________________ 

 Justices

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