CRA never received a s. 83(2) election in respect of a dividend payable in 1997 by Yco to its sole shareholder, an individual ("Y"). The normal reassessment period for Y and Yco had expired.
The Directorate indicated that CRA should request, under s. 83(3.1), that a late election be made under s. 83(3) be made by Yco. If Yco complied within the 90-day period, it would be required to pay an estimate of the late-filing penalty, and CRA would assess under s. 83(5). There would be discretion under s. 220(3.1) to waive penalty or interest.
If Yco did not so comply, consideration would be given to assessing Y beyond the normal reassessment period for a taxable dividend under s. 152(4)(a)(i).