Task force examines the “underground” economy

Michigan Supreme Court Justice Maura D. Corrigan, along with state, local and federal officials, will in a couple of hours unveil a report on Michigan’s so-called “underground economy.”

The problem, according to the report, is that a significant portion of the state economy is “underground” and unreported. It’s estimated in the report that the resulting tax gap is approximately $345 billion annually.

The impact on Michigan’s children and families is enormous, as underground earners underpay child support or evade it altogether. As a result, often child support under-payers and evaders avoid building relationships with their children, for fear that they’ll face economic consequences.

The 82-page report is the culmination of the efforts of the Underground Economy Task Force, and staff of the Michigan Supreme Court and the State Court Administrative Office. The task force’s goal is to bring underground earners “above ground, so that they can participate in their families and the community. The task force will discuss their findings at 10:30 this morning at the Michigan Hall of Justice in Lansing.

Task force members are:

Honorable Maura D. Corrigan, Justice, Michigan Supreme Court

Maurice Aouate, Special Agent In Charge, IRS Criminal Investigation Division

Michael C. Leibson, Assistant U.S. Attorney

Honorable Chad C. Schmucker, Judge, 4th Circuit Court, Jackson

Suzanne K. Hollyer, Director, Oakland County Friend of the Court Office

Mary Lannoye Controller/Administrator, Ingham County

James Long Chief, Corrections Division, Michigan Attorney General

Richard D. McLellan, McLellan Law Office

Patrick O’Brien, Chief, Child Support Division, Michigan Attorney General

Russell Prins Chief, Revenues & Collections Division, Michigan Attorney General

Douglas B. Roberts, MSU Institute for Public Policy and Social Research

Marilyn F. Stephen, Director, Michigan Office of Child Support

MSC grants leave in child support case

If a court terminates a divorced man’s parental rights, must he continue to pay child support?

In In re: Beck, et al. Dep’t of Human Services v. Beck, the Michigan Court of Appeals ruled that the termination of parental rights “does not automatically extinguish the parental responsibility of paying child support.”

Support is a continuing obligation until a court specifically orders otherwise, the COA ruled. See, Michigan Lawyers WeeklySpoiled support – Parental termination does not end child support

The COA observed that MCL 712A.19b allows termination of parental rights but says nothing about ending parental responsibilities. And children have an “ongoing right to financial support … independent of a parent’s retention or exercise of his or her parental rights.”

The COA noted several public policy reasons why a support obligation survives termination of parental rights:

  • Eliminating the benefit of child support after a termination of parental rights does not assist in protecting the child from any harm emanating from the prior parental relationship; instead, it denies the child benefits based on the child’s needs and the parent’s ability to pay.
  • [A]bsent an adoption, terminating support from one parent necessarily places the full financial responsibility on the other parent, often with assistance from the state.
  • [I]f a judgment involuntarily terminating parental rights automatically discharges a parent from responsibility for child support, it could potentially lead to results detrimental to the child’s welfare. It may, for example, force a parent to forgo reporting the abusive or neglectful behavior of a co-parent in order to preserve a child’s right to receive financial support. It may also provide a vehicle for the avoidance of a support obligation by a parent; an irresponsible parent could quickly realize that he or she could escape liability for child support by abusing or neglecting their child.

Last week, the Michigan Supreme Court granted leave to appeal in Beck. The MSC has invited the State Bar of Michigan’s Children’s Law and Family Law Sections to file amici briefs.

The case will likely be argued during the Court 2010-2011 term.

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