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How to defend your claim during an SR&ED review?


Although CRA has well established guidelines to process each claim, the outcome of a review can drastically vary depending on a CRA reviewer. Defending a claim can be very time consuming and exhausting experience not to mention that it can generate a significant delay, which in some cases, can take several years, before the claimant receives the refund check.

The best way to defend a claim during a CRA audit is simply clarifying the project activities by accurately describing project's technological obstacles / uncertainties, formulated hypothesis to overcome the technological uncertainty, procedures that were used to overcome the obstacles and the technological advancement.

Remember, one of the most important factors in successfully defending your claim during a SR&ED review is having a complete and contemporaneous documentation system. Without a complete contemporaneous record of the performed activities, CRA can easily disqualify a claim. Follow up with Kingsway's tips on how to implement a robust documentation system.

If you disagree with the decision of a CRA reviewer / auditor, before taking your case to the Tax Court, you can request for an Administrative Second Review. In this case, the Assistant Director of the SR&ED program will assign a second staff to review your case and provide a second opinion, which, in most cases, will support the initial reviewer's viewpoint just to maintain the CRA's credibility. After the decision is made by the Administrative Second Review, if you still disagree with the outcome, you can file for a Notice of Objection, which you need to file within 90 days.

At Kingsway, we can help you with the most comprehensive documentation system to comply with CRA guidelines. Contact Kingsway Consulting for a FREE, no obligation consultation, and let us show you EXACTLY how to implement a complete documentation system and defend your claim.