In re Grace N. (Tennessee Court of Appeals at Nashville, filed September 27, 2017)
In re Grace N. involves a second appeal from the Davidson County Juvenile Court. Of note, the Court of Appeals found that the trial court should have included the father’s musician profit income and cell phone fringe benefit in calculating child support. With regard to this issue, the Court wrote the following:
Musician Profit Income and Cell Phone Fringe Benefit
We next address Mother’s concern that the trial court committed error by failing to include certain sources of income when it calculated Father’s prospective support obligation. Specifically, she asserts that the trial court erred in failing to include the musician profit income Father reported on his 2015 Schedule C. Moreover, she asserts that the trial court erred when it excluded Father’s employer-provided cell phone fringe benefit from his income.
The trial court excluded the cell phone benefit by concluding that, based on an IRS Internal Revenue Bulletin, the cell phone benefit was “de minimis” and to be ignored when calculating gross income. Father appears to agree that the trial court was entitled to rely on this authority, and he notes that when both the cell phone benefit and musician profit income are considered, these items amount to only $139.00 per month. Although Father may argue that this is an amount “hardly worth consideration,” we agree with Mother that if it is income under the Guidelines, it should not be ignored. Under the Guidelines, gross income includes “all income from any source.” Tenn. Comp. R. & Regs. 1240-02-04-.04(3)(a) (emphasis added). Moreover, with respect to the cell phone benefit specifically, the Internal Revenue Bulletin relied on by the trial court pertains to the calculation of a citizen’s gross income under the Internal Revenue Code. This case does not involve a federal tax obligation, but rather, it involves the calculation of child support under state law. With that in mind, we note that the Guidelines specifically provide that “[f]ringe benefits . . . shall be counted as income if they reduce personal living expenses.” Tenn. Comp. R. & Regs. 1240-02-04-.04(3)(a)(4). Although we can certainly understand Father’s sentiment that the amounts at issue are arguably somewhat minimal, we fail to see how that is a basis to ignore amounts that clearly constitute income under the Guidelines. Therefore, on remand, these additional amounts should be considered when support is recalculated.