2 min

Don’t lie on income tax

Denying same-sex relationship could land you in jail

OR ELSE. Kathleen Lahey says once Bill C-23 goes through, you've gotta be out. Credit: Xtra files

Under Bill C-23, keeping your same-sex relationship in the closet could land you in jail.

“My understanding is that anyone who has an obligation to file an income tax return would be required to disclose whether they are a spouse or in a common-law relationship,” says Kathleen Lahey, a lesbian law professor at Queen’s University in Kingston.

In the top right hand corner of your income tax return, you’re asked to give your marital status. Included in the six boxes is the “Living Common Law” option. That’s the one homo couples who have been living together for more than a year will check off in the year 2001 year under Ottawa’s new spousal rights legislation.

“We all have to answer everything on it truthfully,” says Lahey.

Signing the last page of the return means swearing that all the information you’ve given – including your marital status – is accurate and complete.

The Income Tax Act provides up to five years of jail time for income tax evasion, says Michel Cleroux, a spokesperson with the newly renamed Canada Customs And Revenue Agency.

But Cleroux stresses that this is only a theoretical possibility.

“We have never prosecuted anyone merely for failing to report their common-law relationships,” he says.

Straights have had the responsibility of checking the right box since the early ’90s.

The existence of a common-law relationship is sometimes investigated when looking into allegations of more serious tax evasion offences.

Wrongful declaration often ends in a re-assessment and interest payment on monies owed. Fines are also a possibility.

More often, people are questioned after declaring themselves newly single – making them eligible for child tax benefits and GST rebates.

Cleroux stresses that there is no swoop-down planned on closeted same-sex couples. But Lahey’s been getting a different message.

“When I informally asked the person with whom I was speaking [at Revenue Canada] whether they would seriously consider going after somebody who did not disclose their relationship status I was told – and I will quote: ‘You wanted it. You fought for it. You got it. Now you deal with it.'”

Lahey has other concerns with C-23, the federal same-sex spousal rights bill that’s now on the way to the Senate for a vote.

She says its benefits may be felt more by high income earners while punishing those who depend on Child Tax Credit and GST rebates. And info about your sexual orientation may get in the hands of the wrong people – including a future government that has anti-homo inclinations.

Lahey says a legal common-law relationship may be a mistake.

“I think that far too much of our benefits and penalty system is built on people in relationships and I think that it tends to detract attention from the fact that everybody is really responsible for themselves. It’s going to be very interesting to see what happens with lesbian and gay couples who generally tend to think about how to take care of themselves and not plan on a life of economic dependence.

“I think that this really represents a step back in terms of promoting adult responsibility.”