Introduction


The Court of Appeals clarified that self-employed parents must independently prove the legitimacy of business expenses when calculating child support, as tax returns alone do not establish their reasonableness.


     In McLawhorn v. Nichols (Record No. 0102-24-1, Va. Ct. App. Apr. 15, 2025), the Court of Appeals of Virginia clarified the evidentiary burden for self-employed parents seeking to deduct business expenses from gross income when calculating child support. The Court held that a tax return alone does not compel a finding that business deductions are “reasonable” under Virginia Code § 20-108.2(C). Instead, the party claiming the deductions must independently prove that each expense is both legitimate and directly related to business activity by a preponderance of the evidence.


Case Background

Father’s inability to of er supporting evidence (due to discovery sanctions) prevented him from proving that his claimed business deductions met Virginia’s statutory standard for reasonableness.


     Father, Franklin D. McLawhorn, appealed the Newport News Circuit Court’s order establishing his child support obligation to his daughter. During the trial, the court had sanctioned Father for discovery violations, precluding him from introducing his own evidence regarding income or deductions. The mother, Kate Nichols, presented Father’s federal tax returns and called both Father and his accountant to testify. Because of the sanction order, Father could not use his own tax returns as evidence of his claimed deductions. The trial court refused to deduct any of his listed business expenses when calculating guideline support, concluding that the evidence presented failed to meet the burden required under § 20-108.2(C).


Legal Analysis


The Court reaf irmed that deductions are permitted only when the claiming party proves they are ordinary, necessary, and credible, and tax returns alone cannot substitute for that evidentiaryshowing.


     The Court of Appeals affirmed, emphasizing that Virginia Code § 20-108.2(C) requires proof (not presumption) of reasonableness. The statute permits deduction of self-employment expenses only when the claiming party establishes that such expenses are “ordinary and necessary” for business operations. The Court rejected Father’s argument that the tax returns prepared by his accountant automatically satisfied this burden. A figure written on a return, the Court explained, does not equate to a verified business expense. Trial courts retain broad discretion to determine whether claimed deductions are credible and adequately supported.


     Judge Kimberley S. White, writing for the Court, noted that the sanction order limited Father’s ability to introduce corroborating evidence or testimony. Consequently, Father could not demonstrate the legitimacy of the claimed deductions. The appellate court further underscored that a reviewing court will not overturn a trial court’s findings unless they are “plainly wrong or unsupported by the evidence.” Finally, the Court reaffirmed that § 20-108.2(C) does not define “gross income” as the “net” or “taxable income” listed on a federal return. Courts may consider multiple sources of income - including rental, passive, and business income - when calculating support obligations, provided those determinations are supported by the record.

 
Implications


The ruling underscores that parents - especially those who are self-employed - must maintain documentation beyond tax filings and that discovery sanctions can severely impair their ability to substantiate claimed expenses.


     This decision reinforces a key principle in Virginia child support cases: the parent seeking deductions bears the evidentiary burden. Simply pointing to a tax return or an accountant’s testimony is insufficient. Litigants must provide documentation or corroborating testimony proving that claimed expenses are both reasonable and directly related to the business.


     The ruling also highlights the potential consequences of discovery sanctions. By failing to comply with discovery obligations, a parent may lose the ability to substantiate deductions, leading to a higher calculated income and increased support obligation. For self-employed individuals, careful financial documentation (beyond what appears on tax returns) is essential to preserve the right to claim business-related deductions during child support proceedings.


Smith Strong Can Help


Smith Strong assists self-employed parents in compiling the documentation and testimony necessary to meet Virginia’s evidentiary requirements for business-expense deductions in child support cases.


      Navigating Virginia’s child support system can be complex, particularly for self-employed parents. At Smith Strong, PLC, our attorneys are experienced in child support determinations, income verification, and business expense analysis. We ensure that your financial records meet the evidentiary standards required under Virginia law. To schedule a confidential consultation, contact our Richmond office at (804) 325-1245 or in Williamsburg at (757) 941-4298.