Love is sometimes blind… Marriage and immigration

Jack’s brother, Romeo, called him last night in a crisis.  His new wife Julia, whom he met in Cuba two years ago and whom he married the week after she arrived in Canada two months ago, stormed out of their home last night wanting a separation.  Romeo explained that their marriage was rocky from day one.  It would appear that, after the marriage, Julia became a completely different person than the sweet, kind and amusing woman he had dated long distance for the past two years.  Romeo believed that, with time, they would be able to work things out.  However, he has since found out that Julia never loved him and manipulated him into marriage solely to immigrate to Canada. Having sponsored Julia to become a Canadian resident, Romeo now faces years of financial responsibility towards her even after a divorce.

Romeo’s story is unfortunately similar to that of many other Canadians, and the options available in those situations (until recently) were non-existent.  At the moment, when someone sponsors a non-Canadian to become a Canadian resident, that person must give financial support to their immigrating spouse for three years, even if the marriage or relationship fails. If the immigrating spouse uses social assistance to meet his or her basic needs, the Canadian spouse will have to repay the money to the government, as sponsorship is a legal contract with the Government of Canada. You must meet its terms. It does not matter whether or not a judge would deny the immigrating spouse financial assistance pursuant to Canadian family law principles or whether the parties had signed a marriage contract confirming that no spousal support would be payable in case of separation or divorce.  If the immigrating spouse requires financial assistance to meet his or her needs, the Canadian spouse is 100% responsible, not Canadian taxpayers. Until very recently, there was nothing a “manipulated” spouse could do in this unfortunate situation.

However, in October 2012, the Canadian immigration laws have changed.  In an ongoing effort to deter people from using marriages of convenience to enter into Canada, the Canadian immigration authorities introduced a new regulation that requires certain sponsored spouses to live in a legitimate relationship with their sponsor for at least two years from the day on which they receive their permanent resident status in Canada.  If the sponsored spouse leaves prior to the two year requirement, its status may be revoked.  Canadian authorities can also lay criminal charges against the sponsored spouse.

Based on this new regulation, Romeo will not have to prove that Julia manipulated and married him for the sole purpose of immigrating to Canada, given that she left prior to the two year requirement.  Her status as a permanent resident will be revoked and Romeo’s obligation to financially support her will end since she will have to return to Cuba.  If you are a Canadian citizen or permanent resident and have met someone from another country on the Internet or while travelling, think carefully before marrying them and sponsoring them to come to Canada. Otherwise, blind love could completely turn your world around…

I work for my-self and don’t earn much income!

Jack is self-employed as a human resource consultant for various companies and organizations in the Ottawa area, a business he started to operate when he was laid off from his long-time position with the federal government. As a self-employed business owner, Jack is able to enjoy freedom and many tax benefits that are not available to “regular” employees.  However,  being self-employed also means that he must bear the risks associated with the ups and downs of market demands and fluctuating annual income that “regular” employees do not have to assume. That is what he responded to Jill when her lawyer had the nerves to suggest that his income was actually higher than the amount he declared in his annual income tax return.

Jill’s lawyer had no intention to insult Jack, or to insinuate that he was defrauding Canada Revenue Agency.   For the purpose of determining the annual income required to calculate both child and spousal support, the court is not limited to the revenue declared by  a tax payor in his or her income tax return.   In fact, the tax and other financial benefits flowing from being self-employed, being the sole owner of your own company or living in a country with much lower tax rates (to name only a few) can and will be taken into consideration and will often result in the court attributing a higher income than what is reported on line 150 of the income tax return.  This is because the child and spousal support guidelines (those tables, charts and software that determine how much support is payable) are based on income earned by “regular” employees who are subject to source deductions and less flexible taxation rules, and who must pay for personal expenses with after-tax money.  This is not the case for self-employed people who usually also  enjoy the following (non-exhaustive) benefits;

• paying for personal expenses (such as car expenses, cell phones, meals and entertainment, travel, etc.) through their businesses, thus allowing them to pay with “before-tax money”;
• leaving important sums of money in their company, for reinvestment or future use; 
• investing through their company with “before-tax money”; and
• receiving income as dividends, which brings about a lower taxation rate.

As a result, when assessing a self-employed payor’s income judges and lawyers must look beyond the income tax return to avoid comparing  apples (“regular” employee payors’ income) with oranges (self-employed payors’ income). 

What? You moved away with the children!

Jill and Jack have been arguing for quite a while now.  For Easter, Jack took the children on holidays to his family in Toronto.  On Easter Monday, Jack sent Jill a text message saying the children would not be returning home that night as he had decided to permanently move to Toronto with the children in order to be closer to his immediate family.  Jill is in a state of shock and her first instinct is to call the police and charge him with kidnapping! All Jill wants is to get the children safely home as quickly as possible. Does Jack have the right to move out of town without telling her?

 

While Jack may certainly move, he cannot do so with the children and most importantly without speaking with Jill who has legal options available to her.  The very first thing that Jill should do is to IMMEDIATELY speak with a family lawyer as in custody matters of this kind, acting with all speed is absolutely crucial.  Every hour and every day that Jill delays in taking court action works against her chances of getting back the children quickly.

 

Under no circumstances should Jill consent to Jack’s removal of the children or sign any agreement that deals with custody and access matters until she and her lawyer have reviewed it.  Similarly, nor should Jill say or write anything to Jack that could be interpreted as agreeing with his removal of the children from the family home.  Jill will also be required to start an urgent court proceeding against Jack for the children's return. Custody proceedings are very fact-specific and to save time and legal fees, Jill will need to provide her lawyer with the following information:

 

1. the family’s background (names of the parties and their children, dates of birth, length of relationship, employment, income, etc.);

 

2. Short timeline of the main events leading up to Jack's removal of the children;

 

3. List of family members, daycare providers and friends who can help her care for the children if the court orders their return to the family home;

 

4. why it would be in the children’s best interest to be in your care until the matter is sorted out, and;

 

5. what access, if any, do you propose the other parent to have.

 

The reason for the parent's moving is irrelevant to the court unless it helps to determine the parent's ability to provide for the children's needs. When making parenting decisions, the courts sole concern is the child’s best interest – what are the child's needs and the ability of each parent to satisfy those needs. Of course, the relationship that the child has with each parent will also be examined. Courts do not like to introduce instability into the children’s lives, nor do they want children to remain in environments that leave them vulnerable to emotional and physical harm. Thus, the trend in the Ontario courts has been to disallow the removal of the children from their family home if there is no compelling reason to show that such a move is in their best interests. In Jack’s case, for instance, the court could order for example that he return the children to Jill or have the police apprehend him and return the children to Jill.

 

Moving away with the children without proper discussion and agreement between both parents will not only disrupt the children’s lives, it will create lots of fear and unnecessary anxiety. Speaking to a family law professional and with the other parent before making such a move is a must!

Ask your lawyer for tax receipt and save money!

It is now tax season and Jill has made an appointment with her accountant to finalize her yearly income tax return.  Since Jill needed every penny she received in spousal support to make ends meet, she did not listen to her lawyer’s recommendation to set aside in her savings account 25% of the total income paid by Jack.    She is now extremely stressed and wonders how much money she will need to return to the taxman.  After speaking with her friend Susan, who has gone through a divorce a few years ago, Jill may have found a silver lining that may help her reduce the amount of income tax she owes.  As explained by Susan, all Jill needs to do is ask her lawyer for a tax receipt indicating the total amount of the legal costs she incurred to either:

• establish the amount of support payments (child and/or spousal);

• collect late support payments;

• increase support payments (child and/or spousal);  and/or

 

• defend against a request by the payer (Jack) to reduce established support payments. 

If you are a recipient of child and/or spousal support, you can deduct, in your income tax return, the legal fees incurred to obtain, collect or increase support as well as defend a claim for the reduction of such support.  The legal costs incurred by a recipient to resolve any other issues such as property and parenting cannot be deducted.  Unfortunately, if you are the payer of child and/or spousal support, you cannot claim legal costs incurred to establish, negotiate, or contest the amount of support payments.

 

Your lawyer, if asked, will be responsible to prepare the tax receipt and determine the amount of legal costs you spent in the year to deal with the support issues mentioned above. So if you believe that some of the legal fees you incurred this year qualify as a tax deduction, don’t forget to ask your lawyer for a receipt!