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IN THE COURT OF APPEALS OF IOWA No. 8-180 / 07-1111 Filed April 9, 2008

IN RE THE MARRIAGE OF LEVONNE ALICE HUBER AND DAVID AUGUSTINE HUBER Upon the Petition of LEVONNE ALICE HUBER, Petitioner-Appellee, And Concerning DAVID AUGUSTINE HUBER, Respondent-Appellant. ________________________________________________________________ Appeal from the Iowa District Court for Linn County, Kristin L. Hibbs, Judge.

David Huber appeals the trial court's modification ruling increasing his support obligation for the parties' minor children. AFFIRMED AS MODIFIED.

Ryan P. Tang of Law Office of Ryan P. Tang, P.C., Cedar Rapids, for appellant. Carolyn J. Beyer of White & Johnson, P.C., Cedar Rapids, for appellee.

Considered by Huitink, P.J., and Mahan and Miller, JJ.

2 HUITINK, P.J. David Huber appeals the trial court's modification ruling increasing his support obligation for the parties' minor children. We affirm as modified. I. Background Facts and Proceedings The June 27, 2003 decree dissolving the parties' marriage awarded Levonne Huber physical care of the parties' two minor children. David was

ordered to pay Levonne $603.62 monthly child support. At that time, David was employed as a chiropractor, earning $40,000 per year. Levonne's annual

earnings were approximately $18,000. The amount of child support awarded was calculated based on the parties' stated incomes and adjusted for a twentyfive percent extraordinary visitation credit. In 2004 David incorporated Huber Chiropractic, P.C. and opened his own clinic in Cedar Rapids. Huber Chiropractic, P.C. is a Subchapter S corporation. David is the corporation's only shareholder. On September 5, 2006, the Child Support Recovery Unit (CSRU) filed a petition to modify the child support provisions of the June 2003 decree. CSRU cited David's increased earnings as a substantial change of circumstances justifying an increase in his child support obligation. On May 25, 2006, CSRU submitted a revised child support guidelines worksheet based solely on the parties' 2006 individual income tax returns (Form 1040). CSRU's worksheet

indicated David's 2006 gross taxable income was $74,389, including wages of $46,258 (Form 1040 line 7) and business income of $25,697 (Form 1040 line 17) from Huber Chiropractic, P.C. CSRU's worksheet also indicated Levonne's 2006

3 gross taxable income was $18,379 (Form 1040 line 22). CSRU's resulting child support calculations indicated David's child support should be $899 per month after an adjustment for a twenty-five percent extraordinary visitation credit. For reasons not entirely clear in the record, Levonne retained her own attorney to represent her in the modification proceedings. Levonne's attorney requested production of Huber Chiropractic, P.C.'s corporate tax returns, bank records, and other financial information relevant to David's income and financial condition. The trial court granted Levonne's motion to compel David's

compliance with her requested discovery and awarded Levonne related attorney fees in an amount to be determined in the final modification decree. In a separately-submitted child support guidelines worksheet, Levonne claimed David's 2006 annual gross taxable income was $111,949. Levonne

arrived at this amount by adding $48,692, the amount Huber Chiropractic, P.C. deducted on its 2006 corporate tax return for compensation of officers (Form 1120S line 7), and a $63,257 loan to shareholder (Form 1120S Schedule 1 line 7). Levonne's worksheet also indicated her 2006 annual gross taxable

income was $18,379. Levonne's resulting calculation indicated David's monthly child support obligation should be $1227.71 after adjustment for an extraordinary visitation credit. David's child support guidelines worksheet indicated his gross taxable income was $46,258 as reported on his 2006 personal income tax return. His worksheet also indicated Levonne's 2006 gross annual taxable income was

4 $18,683. David's resulting calculations indicated his child support obligation

should be $679.60 after an adjustment for an extraordinary visitation credit. The fighting issues at trial concerned David's actual income and his financial condition. According to Levonne's version of the evidence, David's

standard of living exceeded his income and he was understating or otherwise concealing his income and financial condition. Levonne also offered expert

testimony from a certified public accountant to support her contention that the earlier-mentioned $63,257 loan should be treated as David's personal income. Although David denied Levonne's claims concerning his income and financial condition, he testified that he agreed with the "figures" CSRU used to compute his child support as well as the amount of child support ($899 per month) requested by CSRU. David denied receiving any loans from Huber

Chiropractic, P.C. and could not explain why the loan to shareholder appeared on Huber Chiropractic, P.C.'s 2006 corporate tax return. The record also

includes bank records indicating David deposited $82,584 in his personal checking account, including income tax refunds totaling $7538. Based on the foregoing evidence, the trial court found: CPA Epping testified that tax returns show the $63,257 as a loan to the shareholder would have been money to David. Mr. Epping testified as to the tax reasons why such a distribution made to the sole owner of the corporation might be designated as a loan rather than as salary, on which income tax and FICA (15.3%) would be due, or as business income on which taxes would have to be paid. Based on his extensive experience with returns for professional S corporations, Mr. Epping noted it was unusual to designate the money as a loan to David when the corporate return reflects a loan from David of $69,394. Mr. Epping acknowledged that if, indeed, the amount was paid as a loan, it would be an indebtedness owed

5 by David

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