Non-Reported Income and Injury Claims

Financial records of wages/earning are helpful when trying to show to a court the economic losses an individual has suffered as a result of an injury. It is important to ensure that accurate records are maintained and that appropriate accounting help is prioritized following an injury.

Many individuals receive cash tips related to their employment (waitress and delivery driver) and self-employed individuals (child care and handymen) are often paid in cash or personal cheque for work completed. Mistakes can occur when taxes and filed and income can be inappropriately reported. If appropriate records are not maintained prior to the collision or if an individual has not appropriately reported their taxable income in the past it complicates determining the magnitude of the loss they may have sustained but does not prevent a claim from being awarded. In the case of a waitress it is easy to establish the hourly rate they were paid prior to the accident but much more difficult to show the tips earned. In the case of a self-employed individual that has failed to file taxes

The act of not filing accurate tax returns or not filing tax returns at all in the past does not prevent an individual from proving a wage loss claim and a determination of wage loss however can be based in part upon income earned but not reported in past years. The courts have determined that a defendant cannot avoid compensating for that loss on the ground that the income was previously unreported. The greatest hurdle is to establish what the magnitude of the income loss is without documentation. This can be done through comparison to prior bank records, customer testimony and comparisons to other individuals in the same employment field. In cases where mistakes may have occurred when filing tax returns, income was not appropriately reported or no tax returns were filed prior to the injury it is important to ensure that all financial records are maintained and professionals are retained to assist in bringing an injury claim.