Section 185 — Income Tax Act: Assessment of tax

The Minister shall, with all due dispatch, examine each election made by a corporation in accordance with subsection 83(2), 130.1(4) or 131(1), assess the tax, if any, payable under this Part in respect of the election and send a notice of assessment to the corporation. Where an election has been made by a corporation in accordance with subsection 83(2), 130.1(4) or 131(1) and the Minister mails a notice of assessment under this Part in respect of the election, that part of the amount assessed then remaining unpaid and interest thereon at the prescribed rate computed from the day of the election to the day of payment is payable forthwith by the corporation to the Receiver General. Subsections 152(3), 152(4), 152(5), 152(7) and 152(8) and 161(11), sections 163 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require. Each person who has received a dividend from a corporation in respect of which the corporation elected under subsection 83(2), 130.1(4) or 131(1) is jointly and severally, or solidarily, liable with the corporation to pay that proportion of the corporation’s tax payable under this Part because of the election that the amount of the dividend received by the person is of the full amount of the dividend in respect of which the election was made, but nothing in this subsection limits the liability of any person under any other provision of this Act. The Minister may, at any time after the last day on which a corporation may make an election under subsection 184(3) in respect of a dividend, assess a person in respect of any amount payable under subsection 185(4) in respect of the dividend, and the provisions of Division I of Part I apply, with such modifications as the circumstances require, to an assessment made under this subsection as though it were made under section 152. If under subsection (4) a corporation and another person have become jointly and severally, or solidarily, liable to pay part or all of the corporation’s tax payable under this Part in respect of a dividend described in that subsection, a payment at any time by the other person on account of the liability shall, to the extent of the payment, discharge their liability after that time; and a payment at any time by the corporation on account of its liability shall discharge the other person’s liability only to the extent of the amount determined by the formula (A - B) × C/D where A is the total of the amount of the corporation’s liability, immediately before that time, under this Part in respect of the full amount of the dividend, and the amount of the payment, B is the amount of the corporation’s liability, immediately before that time, under this Act, C is the amount of the dividend received by the other person, and D is the full amount of the dividend.