The appellants, quarterly tax remitters, underestimated their tax installments for the first three quarters of 2019.
They argued that a large, unanticipated dividend declared in November 2019 caused the deficiency, making it impossible to foresee the increased tax liability.
The Tax Court of Canada dismissed the appeals, holding that the appellants chose to estimate their taxes rather than use the safe-harbour no-calculation option based on the previous year.
Because the dividend was a deliberate tax planning choice and not an unforeseeable event, the appellants were liable for the resulting arrears interest and penalties.
