If a recent court ruling stands, Indians living anywhere in Canada may be able to avoid paying income taxes. Under the Indian Act, income earned on reserves by Indians living on reserves is n tax-exempt, but off-reserve Indians are taxed like everybody else. Now a court has said that Indians living and working off-reserve may also be income tax exempt. And other court cases are lined up to argue that Indians are exempt from taxation, period.

At issue is the practice where off-reserve Indians work "on contract", their salaries paid through a reserve-based employment agency that "leases" their services to off-reserve employers. The specific court case involved Rachel Shilling, an Indian living in Toronto and working for a social service agency. Her $47,000 salary is funneled through an employment agency called Native Leasing Services on the Six Nations Grand River reserve. The judge concluded that since her salary is through a reserve-based company, Ms. Shilling could, as a status Indian, avoid paying any income tax.

Taxpayers should be outraged by the legitimization of this tax dodge, the extension of race-based tax laws, and the basic unfairness to Canada's 15 million taxpayers. However, this case suggests several innovative strategies that might help all of us to avoid the taxman.

Sign up with reserve-based employment agency to launder your income. Check family tree for native ancestry (optional).

According to Judge Karen Shardlow, "the most important factor to take into account in determining the location of Ms. Shilling's employment is the location of her employer. Her employer is located on a reserve, which favours the conclusion that her employment income is located on the reserve."

If you work in Quebec for an Alberta or Ontario-based firm, try paying Alberta or Ontario tax rates. It's better if you work for an American company, or a company based in an oil-rich country where they don't pay any income taxes. Viva Kuwait!

Ms. Shilling argued that living and working on a reserve should not be prerequisites for a tax exemption. What should matter, she said, is whether she "maintains relationships with native people and to her native community," is an accepted member of her reserve, identifies herself as a native person and works for the benefit of natives.

If you live in Newfoundland, try claiming that you maintain relationships with Ontarians, are accepted as an Ontarian, identify yourself as an Ontarian, and work for the benefit of Ontarians. Therefore, you should pay Ontario's lower tax rates. Also claim that Toronto is the centre of the universe . it won't get you lower taxes but will make you look like a real Torontonian.

Ms. Shilling argued that the requirement to live on a reserve to get the tax exemption "discriminates on the basis of where she lives" and therefore is in violation of equality before the law in the Charter of Rights and Freedoms. Ergo, everyone in Saskatchewan is discriminated against because they don't live in Alberta with its lower tax rates. So instead of moving to Alberta, you stay in Saskatoon and pay reduced Alberta taxes. You'll look as smug as any Lexus-driving Calgary oilman.

If you live in Windsor, Ontario or Windsor, Nova Scotia, try claiming the Northern residents tax credit. No reason those folks up north get preferred tax treatment just because its colder and they have less sunlight in the winter.