This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2000).






In re:  Kent Lewis, petitioner,





Julie Lewis, n/k/a/ Julie Blumhoefer,



Human Service of Faribault and Martin Counties



Filed August 27, 2002

Reversed and remanded

Randall, Judge


Martin County District Court

File No. F1-87-613



Terry W. Viesselman, Viesselman & Barke, P.A., 923 North State Street, Suite 130, Fairmont, MN 56031 (for appellant)


Julie Blumhoefer, 5530 157th Street North, Hugo, MN 55038-8793 (pro se respondent); and


Brian D. Roverud, Special Assistant Martin County Attorney, 125 North Main, Post Office Box 5, Blue Earth, MN 56031 (for Human Service of Faribault and Martin Counties)



            Considered and decided by Stoneburner, Presiding Judge, Toussaint, Chief Judge, and Randall, Judge.

U N P U B L I S H E D   O P I N I O N


            Kent Lewis appeals, arguing that the district court (a) incorrectly ordered retroactive modification of child support and (b) improperly excluded 50% of appellant's claimed deductions when it determined income for child support purposes.  We reverse and remand. 


            The marriage of appellant Kent Lewis and respondent Julie Lewis was dissolved on July 11, 1988.  Respondent was awarded custody of the parties' minor child, and appellant was ordered to pay $100 per month in child support.  In April 2001, a proposed order to modify child support and a motion for modification were filed by respondent.  Appellant's tax returns show income from farming, trucking and rental of hog buildings and equipment.  Appellant's tax returns show that he had a profit of $72,203 for 1997 and $30,168 for 1998.  His 1999 and 2000 tax returns shows that appellant suffered a loss of $22,853 and $17,765 respectively.  The magistrate concluded that the depreciation claimed on the tax returns was not realistic and thus reduced the depreciation by 50% when it calculated appellant's income for child-support purposes. 

            On June 13, 2001, appellant was served a subpoena duces tecum for tax returns dated 1998-2000.  The hearing was scheduled for July 10, 2001, but appellant was granted an extension.  At the August 14, 2001 hearing, appellant provided his tax returns for all but 1996 because his accountant was unable to prepare the tax returns.  Appellant requested and was denied a continuance for the August 14, 2001 hearing to obtain his 1996 tax returns.  Following the hearing, the magistrate increased appellant's child support obligation to $950 per month plus $45 per month for medical support.  The magistrate also made the order retroactive to January 2, 1997, finding that appellant's failure to provide tax returns was a material misrepresentation.  Appellant requested and was granted a review by the district court, which lowered appellant's child-support obligation, because of a mathematical error, to $893 per month plus $45.  This appeal follows.


            Appellant argues that the district court abused its discretion when it modified appellant's child-support obligation retroactively and when it increased his child-support obligation by disallowing 50% of the deductions that he claimed on his tax returns.  Determinations of past due support are reviewed under an abuse-of-discretion standard.  LaChapelle v. Mitten, 607 N.W.2d 151, 166 (Minn. App. 2000), review denied (Minn. May 16, 2000).


            We agree with appellant's assertion that the district court erred when it modified appellant's child support retroactively to January 1, 1997.  In December 2001, the district court awarded respondent retroactive child support, finding that appellant failed to comply with a previous court order to provide the county child-support office with his 1995 and 1996 tax returns.  Generally, "[a] modification of support or maintenance * * * may be made retroactive only with respect to any period during which the petitioning party has pending a motion for modification but only from the date of service of notice of the motion on the responding party * * * ."  Minn. Stat. § 518.64, subd. 2(d) (2000).

            Modification of a child-support obligation may be applied to an earlier period if the court finds that the 

            party seeking modification was precluded from serving a motion by reason of a significant physical or mental disability, a material misrepresentation of another party, or fraud upon the court and that the party seeking modification, when no longer precluded, promptly served a motion * * * . 


Id., subd. 2(d)(1).  The record shows that appellant's failure to provide the court with his tax returns was neither a material misrepresentation nor a fraud upon the court that would allow a retroactive application of child-support modification beyond the statutory two years.  See Gully v. Gully, 599 N.W.2d 814, 822 (Minn. 1999) (stating that failure to comply with a district court's order to provide information constitutes a material misrepresentation).  We disagree with respondent's assertion that the district court properly applied child-support modification because appellant never voluntarily producedhis tax returns as was required under the original dissolution decree.  The record does show that appellant was behind a few years in supplying his tax returns to respondent but there is no indication that when appellant was asked to produce his tax returns he did not oblige.  The record shows that appellant providedhis 1993 and 1994 tax returns to the county child-support enforcement unit when his child-support obligation was reviewed in 1996.  When the court ordered him, in 2000, to produce his tax returns, he complied with the order and produced copies of his tax returns for the years 1997, 1998, 1999, and 2000. At that time, appellant was unable to produce his returns for the year 1996 because they had not been prepared.  He asked for a continuance for his accountant to finish preparing his 1996 tax returns and the district court denied his request.  Thus, there is no indication that appellant's failure to provide the court with his 1996 tax return was a material misrepresentation that would allow the court to apply child support retroactively.

Increase in child support

            We agree with appellant that the district erred when it disallowed 50% of his deduction claimed on his tax returns when it calculated his income for child-support purposes and increased his child-support obligation.  The district court disallowed 50% of the depreciation appellant claimed on tax returns because appellant conceded that the depreciation taken on his income tax returns does not reflect the real-life loss life of the property. 

            The evidence does not support the determination that appellant's depreciation is more than the depreciation allowed under Minn. Stat § 518.551.  Under Minn. Stat. § 518.551, subd. 5b(a) (2000), income from self-employment is based on "receipts and expenses," a parent's "most recent federal tax returns," and "all other documents evidencing income as received that provide verification of income over a longer period".  Appellant, while being questioned by the district court, admitted that depreciation for tax purposes is twice as fast as the real-life loss.  However, appellant also stated that he did not want "to depreciate faster than it should." 

Appellant, a self-employed trucker and hog farmer, had the burden of proving, when challenged, that his claimed depreciation constituted ordinary and necessary expenses.  Minn. Stat. § 518.551, subd. 5b(f) (2000).  The record shows that appellant supplied the magistrate with a copy of his financial statements and that the magistrate failed to consider the financial statements when calculating his income and instead considered a speculative amount of depreciation rather than necessary and ordinary expenses as required by law.  Courts must evaluate claimed depreciation deductions to determine whether they reflect true depreciation or depreciation for tax purposes only.  Beltz v. Beltz, 466 N.W.2d 765, 767 (Minn. App. 1991), review denied (Minn. Apr. 29, May 23, 1991).

The record shows that appellant's trucking business had a $72, 203 net profit, but this was in 1997 only.  In 1998 the business showed a $30,168 profit, while in 1999 and 2000, appellant's trucking business suffered a total loss of $40,618.  Although appellant had one good year in his trucking business, there is no inference or findings that appellant's other businesses were operated in bad faith or were shell corporations to reduce appellant's income for child-support purposes.  According to appellant's tax returns for the years 1997-2000, his average pre-tax adjusted income was $19,363.  There is no evidence supporting the conclusion that the depreciation appellant claimed was not legitimate.

It was an abuse of discretion for the district court to find that appellant failed to meet his burden of establishing that his claimed depreciation was true depreciation rather than depreciation for tax purposes only.  Cf. Taflin v. Taflin, 366 N.W.2d 315, 319 (Minn. App. 1985) (stating that party failing to submit evidence to support claim could not object to district court's failure to adopt that party's position).

We remand to the district court to recalculate appellant's business depreciation expense and then to recalculate a reasonable amount of child support for appellant to pay based on appropriate findings setting out appellant's net monthly income for purposes of establishing child support.

            Reversed and remanded.