Hi Brenda, you're correct, it's not a tax-deductible expense. I would still post it as an expense though, for the purpose of creating an accurate income and expense report. I would create a separate expense account for CRA Interest and Penalties and post it there. That way it would be easy to exclude it when preparing the corporate income tax return. Alternatively, you can post it to your shareholder drawings account if you would prefer to keep it off of the Income and Expense report.
