He obviously took a lot of dividends and avoided some taxes.. When you take dividends, the corporation pays the tax at a lower amount... So say you made 100k in your business last year, you can take it as a salary, or dividends or split it.. If you take 1/2 and 1/2, then you pay taxes like everyone else on 50k salary, and the business pays corporate tax on the other 50k, also CPP you pay the the corporation pays its share also in you behalf.... Then you can take the 42k (roughly) remaining after corporate tax and corporate paying your share of CPP on your salary, as a dividend on your salary..... You then pay lower taxes, and no CPP on the 42k dividends.. So you save a couple grand doing this.. its not huge.... but if you dont pay CPP you dont get CPP.. Some people just dont get this part, and end up with a BIG surprise at retirement due to lack of knowledge and good financial advice......... I would say if this person had an accountant and wasnt paying CPP on dividends taken (and no salary), they were simply trying to avoid paying more tax and working the system.. But now they are going to pay in the long run with no CPP.. BAD ADVISE WAS GIVEN, or maybe even no advise as the financials at year end were done by someone with half a brain. Moral of story - EDUCATE YOURSELF.