It isn’t uncommon to hear managers and business owners use adjectives like ‘intimidating’ or ‘surviving’ with SR&ED reviews. Driving this sentiment is the common misconception that a review indicates rejection or is some form of a test. A lack of familiarity with the topic and the inability to find the time to do so in the midst of rushed work schedules does not help either. If you were to look into the CRA’s official section for this, you’d find very detailed pointers, guidelines, and manual links to help you navigate the review process. You would find a pretty exhaustive outline of what to expect from the reviews and how best to work with the RTAs too. Of course, given the amount of information there, it can be a lot to get through.
Meanwhile, we’ve had years of experience helping clients (many of them first-time claimants) with SR&ED reviews. So, there are a few key basics that we consider essential to note.
When do you actually have to work with the CRA?
If you submitted a claim that is assessed and accepted as is, you won’t have to interact with the CRA beyond the usual standard mails. However, if your claim is picked up for a review, you will be interacting with their team of the reviewer(s) more intimately.
We always like to reiterate that a review is an exercise in clearing doubts and seeking clarifications. It helps RTAs gain a better understanding of the claim and the work it covers.
Step 1: The call
The RTA will call you directly to let you know about the review. Sometimes, this call is all it may take to clarify doubts. However, if the call doesn’t, a physical visit becomes essential.
Step 2: Preparing for the visit
Like with any professional meeting, SR&ED reviews are most efficient when you plan and prepare for the visit in advance. The best part of this process is that the RTA is an active participant. You can and should talk to them about their agenda, requirements, and more.
A (general) guide to working with the CRA
Look at this visit as an opportunity for dialogue and discussion. You are not being tested here. You are encouraged to work with the RTA – freely and fearlessly – to make the visit as seamless as possible. There’s a possibility that the technical review throws up more issues than was previously determined. This can expand the scope of the review. It may also require more meetings. Knowing this possibility in advance can make the process less frustrating.
- Start talking to the RTA even before the visit.
- Understand the issues they wish to address and the approach they intend to take.
- Find out what they need – more supporting evidence or any personnel involved that they may want to talk to – before the visit.
- Keep all information ready. Make sure the people you select to be interviewed are best equipped to explain the work done.
- When trying to bolster your case, use new facts or information. Don’t rehash points and arguments from the original claims.
A SR&ED review is a collaborative exercise. RTAs, highly qualified professionals, are not looking for a combative session with you. They have no intention of discrediting your claim. They’re trained to address your concerns. Of course, there’s a possibility that after all explanations from your side, the final report doesn’t clear your claim for tax credits. However, the reasons, as well as further redressal mechanisms, will always be explained clearly. You can always check the CRA’s detailed resources for comprehensive details. Better still, work with your SR&ED consultant to get a hands-on understanding of all aspects.