This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).







In re the Marriage of:

Deina Mohamad Zaghloul, petitioner,





Ashraf Samir Elashri,



Filed August 24, 2004

Affirmed in part, reversed in part, and remanded

Willis, Judge


Ramsey County District Court

File No. F3-02-126


Mark H. Gardner, 328 Bremer Bank Building, 8800 West Highway 7, St. Louis Park, MN  55426 (for respondent Zaghloul)


Susan Gaertner, Ramsey County Attorney, Amy A. Anderson, Assistant County Attorney, 50 West Kellogg Boulevard, Suite 415, St. Paul, MN  55102 (for respondent Ramsey County Child Support and Collections)


John G. Westrick, Marcia McDowall-Nix, Westrick & McDowall-Nix, PLLP, 450 Degree of Honor Building, 325 Cedar Street, St. Paul, MN  55101 (for appellant)


            Considered and decided by Randall, Presiding Judge; Willis, Judge; and Minge, Judge.

U N P U B L I S H E D   O P I N I O N


In this child-support dispute, appellant-father argues that (a) the district court erred by imputing income to him; (b) the district court failed to apply the appropriate statute in imputing income to him; and (c) the district court erred by failing to deduct federal and state income taxes from the gross income imputed to him.  Because the findings regarding appellant’s gross income are not clearly erroneous, we affirm the district court’s gross-income determination.  But because the district court failed to reduce the gross income ascribed to appellant by the taxes owed on that income, we reverse and remand for a recalculation of appellant’s net income and child-support obligation.


The marriage of appellant Ashraf Elashri and respondent Deina Zaghloul was dissolved by a May 22, 2002 judgment, which awarded Zaghloul sole physical custody of the couple’s minor child.  Elashri’s child-support obligation was set at $250 per month, based on his claimed monthly income of $1,000.  The judgment provided, however, that child support would be reviewed later in a separate hearing. 

            At the child-support hearing, which finally was held before a family court referee on September 17, 2003, the county accused Elashri of attempting to avoid his child-support obligations and defrauding the bankruptcy court[1] and the IRS by understating his income.  The county asserted that the income Elashri reported on his tax returns, which in some years was zero, could not support his lifestyle.  The county also questioned the purported sale in 2001 of Elashri’s business, Adam Travel, to his brother because there was no documentation of such a sale, and because recent records of Adam Travel show a co-mingling of Elashri’s personal and business expenses.  Finally, the county noted that Elashri claimed a $2,500 monthly income in a 2003 rental application and a $10,000 monthly income in a 2000 mortgage application.  The referee took the matter under advisement and left the record open for submission of responsive affidavits. 

On September 29, 2003, Nazmi Yousef, Elashri’s business associate and a distant relative of Elashri’s present wife, submitted an affidavit in which he states that Elashri claimed that he “was making at least $70,000 per year” after the marriage dissolution, that Elashri transferred substantial amounts of money to associates in Egypt, that Elashri’s brother did not work for–let alone own–Adam Travel, and that Elashri told Yousef that he “was running all of his money through Adam Travel . . . in order to limit the child support for his ex-wife.” 

On December 18, 2003, the district court adopted the referee’s recommendations, which determined that the income documentation that Elashri provided was “inadequate, incomplete, and give[s] every indication of being fraudulent.”  The adopted recommendations found that Elashri’s sale of Adam Travel “appears to be a sham transaction in anticipation of [his] bankruptcy and divorce” and noted several documents, including tax returns and mortgage and rental applications, in which Elashri listed himself as owner or manager of Adam Travel after the purported sale of his business.  The order adopting the recommendations concluded:

[Elashri’s] position that he has no assets, that he is an employee and not the owner of Adam Travel, and that his monthly income is $1,000 per month is not credible.  The evidence is credible that [Elashri] does not hesitate to perjure himself as the situation warrants or to set up his creditors so that they are never paid.  To accept [Elashri’s] position would be to find reasonable that a person would continue to work for or in the same business for over five years and earn a pittance.  Such a position would only lead to [the] conclusion that [Elashri] is intentionally under employed. Fortunately for [Elashri] he is not earning a pittance by being under employed, but making such a significant income that it is worth it to him to maintain an ongoing fraud.


The district court therefore “imputed” to Elashri an annual gross income of $70,000 and determined that it would deduct from Elashri’s income only “the taxes [Elashri] has actually ever paid”–$42 per month based on his claimed income of $1,000 per month–and set Elashri’s monthly child support obligation at $1,447.75, guidelines support for a monthly income of $5,791.  Elashri appeals.


A district court has broad discretion to provide for the support of parties’ children.  Putz v. Putz, 645 N.W.2d 343, 347 (Minn. 2002); Rutten v. Rutten, 347 N.W.2d 47, 50 (Minn. 1984).   A district court abuses its discretion when it sets support in a manner that is against logic and the facts on record or misapplies the law.  Rutten,347 N.W.2d at 50-51 (finding that the district court did not set support in a manner that is against logic or facts on record); Ver Kuilen v. Ver Kuilen, 578 N.W.2d 790, 792-93 (Minn. App. 1998) (holding that the district court misapplied the law).  A district court’s determination of an obligor’s income for child-support purposes is a finding of fact that will not be set aside if it has a reasonable basis in fact and is not clearly erroneous.  State ex rel. Rimolde v. Tinker, 601 N.W.2d 468, 470 (Minn. App. 1999).


Elashri first argues that the district court erred by disregarding Elashri’s pay stubs and tax returns in determining his income.  He asserts that these records clearly show that he was making no more than $1,000 per month and that the court’s reliance on Yousef’s affidavit to justify its income determination “was error and requires a remand.”

Parties to a martial-dissolution proceeding have a duty to make a full and accurate disclosure of all assets and liabilities to facilitate the district court’s child-support determinations. See Sanborn v. Sanborn, 503 N.W.2d 499, 503 (Minn. App. 1993) (affirming the district court’s order to vacate a marital-dissolution decree’s property division, as well as spousal-maintenance and child-support determinations, after a party failed to fully disclose assets), review denied (Minn. Sept. 21, 1993). It is within the province of the district court to determine whether a party has fulfilled this duty and to reject or accept the evidence presented.  See Vangsness v. Vangsness,607 N.W.2d 468, 475 (Minn. App. 2000) (stating that this court “cannot reweigh the evidence presented to the [district] court”); see also Eisenschenk v. Eisenschenk, 668 N.W.2d 235, 242-43 (Minn. App. 2003) (affirming district court’s estimation of child-support obligor’s income where obligor failed to make full financial disclosure), review denied (Minn. Nov. 25, 2003).  The district court may consider a party’s lifestyle in determining the credibility of income information.  See Johnson v. Fritz, 406 N.W.2d 614, 616 (Minn. App. 1987) (finding that father’s lifestyle could not be supported by what he purported to earn per month); Vitalis v. Vitalis,363 N.W.2d 57, 59 (Minn. App. 1985) (upholding district court’s finding that father’s lifestyle and cash flow evinced a significantly larger income than that reported for tax purposes).

Here, the district court determined that Elashri’s tax records and pay stubs do not reflect his actual earnings.  It noted that Elashri’s total income, according to his federal 1040 tax forms, totaled less than $25,000 over a period of five years.  The district court noted that during that same period, Elashri owned a four-bedroom house and a late-model luxury car and found credible evidence that Elashri had transferred substantial sums of money to associates in Egypt.  Further, it cited several recent documents in which Elashri reported an income substantially greater than $1,000 a month.  In light of the evidence, the district court’s determination of Elashri’s gross income has a reasonable basis in fact and is not clearly erroneous.


Elashri contends, alternatively, that the district court erred by failing to apply Minn. Stat. § 518.551, subds. 5b(d) and (e) (2002), when determining his gross income.  Those subdivisions provide, in relevant part:

(d) If the court finds that a parent is voluntarily unemployed or underemployed … support shall be calculated based on a determination of imputed income.… Imputed income means the estimated earning ability of a parent based on the parent’s prior earnings history, education, and job skills, and on availability of jobs within the community for an individual with the parent’s qualifications.


(e) If there is insufficient information to determine actual income or to impute income pursuant to paragraph (d), the court may calculate support based on full-time employment of 40 hours per week at 150 percent of the federal minimum wage or the Minnesota minimum wage, whichever is higher….


Elashri asserts that the district court was thus statutorily obligated to “either impute income based on the minimum wage times 150% or to determine [Elashri’s’] earning capacity using the factors discussed in Minn. Stat. § 518.551, subd. 5b(d).” 

            Elashri’s argument is premised on the assumption that the court found him underemployed.  But the court expressly found that Elashri was making “a significant income” and that he was maintaining “an ongoing fraud” to conceal this income.  The court then “imputed” income to Elashri, not in the sense in which the term is used in subdivision 5b(d), which applies only where there is a finding of voluntary unemployment or underemployment, but rather in the sense that it “ascribed or charged” the income to him based on the evidence in the record.  See Black’s Law Dictionary 758 (6th ed. 1990) (defining “imputed”).  Because the district court did not find that Elashri was underemployed, it was not statutorily obligated to consider the factors in subdivision 5b(d).

            Further, when subdivision 5b(d) is inapplicable, a district court should apply the formula provided in subdivision 5b(e) only when “there is insufficient information to determine actual income . . . .”  Minn. Stat. § 518.551, subd. 5b(e).   Here, the district court determined that there was sufficient information to determine income based on (1) Elashri’s self-reported income in recent documents; (2) evidence that Elashri transferred funds to associates in Egypt; (3) Elashri’s lifestyle; and (4) Yousef’s affidavit, a document that the district court specifically found credible.  See Minn. R. Civ. P. 52.01 (providing that findings of fact based on documentary evidence shall not be set aside unless clearly erroneous).  Considering the evidence in the record, the district court did not err by failing to apply subdivision 5b(e).  See Strauch v. Strauch,401 N.W.2d 444, 448 (Minn. App. 1987) (stating that income determination for child-support purposes will be affirmed if it has reasonable basis in fact).


Elashri next contends that even if the district court did not err by ascribing income to him, its net-income determination must be reversed for failure to deduct federal and state taxes owed on the ascribed income.  Whether or not support is set at the guidelines amount, net monthly income must be determined, or at least estimated. Minn. Stat. § 518.551, subd. 5(b).  “Net [monthly] income” is calculated by reducing “total monthly income” by federal and state taxes, among other deductions.  Minn. Stat. § 518.551, subd. 5(b)(i)-(iii). 

Here, the district court did not reduce Elashri’s ascribed gross income by the taxes due on that income, instead considering “only the taxes [Elashri] has actually ever paid.”  Zaghloul and the county assert that the district court correctly applied the law, citing Dinwiddie v. Dinwiddie, 379 N.W.2d 227 (Minn. App. 1985), for the proposition that Elashri’s avoidance of taxes has made all non-reported income available for child-support purposes. 

Although this court stated in Dinwiddie that “[n]et income is properly calculated based upon monies available to the tax payer,” 379 N.W.2d at 229 (emphasis in original), Dinwiddie did not address the issue of whether unpaid taxes are funds available for paying child support.  When this court has specifically addressed this issue, we have consistently held that any taxes owed, whether or not actually paid, are not amounts “available” for support purposes.  See, e.g., Marx v. Marx, 409 N.W.2d 526, 529 (Minn. App. 1987) (affirming district court’s estimation of support obligor’s income by using his total income “less 25 percent for taxes and other deductions”); Looyen v. Martinson, 390 N.W.2d 465, 468 (Minn. App. 1986) (affirming district court’s calculation of self-employed farmer’s net monthly income for support purposes after it “subtracted federal and state taxes”); Larson v. Larson, 370 N.W.2d 40, 42-43 (Minn. App. 1985) (stating that if obligor operated farm as tax shelter, district court could disregard tax-shelter effect of farm and calculate income based on  obligor’s regular earnings after reducing his wages for standard tax liabilities).  Although Elashri has not paid taxes on the income ascribed to him, he nonetheless is liable for those taxes.  The district court could not, therefore, consider these funds “available” in computing net income under Minn. Stat. § 518.551, subd. 5(b).

Because the record supports the district court’s conclusion that Elashri’s tax records and pay stubs did not reflect his actual income, we will not disturb the court’s gross-income determination.  But because the court failed to deduct federal and state income taxes owed on that gross income, we reverse and remand for a recalculation of Elashri’s net income and child-support obligation.

Affirmed in part, reversed in part, and remanded.

[1] Elashri filed for bankruptcy protection on January 24, 2003.