Mr. Turnover visited his accountant Ms. Blackford on January 10th 2021. He explained how he had his CCPC pay a dividend to himself today, but that he wished he had paid the dividend last year so that his CCPC would be able to receive a dividend refund on the 2020 tax return. Ms. Blackford informed Mr. Turnover that it was fine, and that he can just ‘back-date’ the dividend and claim on his tax return that he actually paid it last year. Ms. Blackford knew, however, that this was not allowed, but she figured the CRA would never check anyway. Explain what penalties would arise for Mr. Turnover and Ms. Blackford if the CRA discovers this discrepancy.

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A dividend is the distribution of some of a companys earnings to a class of its shareholders as determined by the companys board of directors Common shareholders of dividendpaying companies are typica... View the full answer