CATA Announces Feedback On New CRA Review Process For SR&ED

In June of 2010, the Canada Revenue Agency (CRA) released a new internal procedural manual for its Research & Technology advisors, along with a new guide to the claim review process for claimants.
In polling businesses and SR&ED practitioners, the Canadian Advanced Technology Alliance (CATA) found that organizations experiencing reviews under this new regime were "finding the reviews much more rigid, and that that the positions being taken and the information requirements more oriented to dedicated research projects as opposed to projects where the R&D is highly integrated within the context of the need to develop advanced technologies required for improved commercial products, processes, and services."
"We are hearing of companies that thought they knew what was expected and that had good claiming experiences now not being able to support their current claims to the satisfaction of reviewers when their claims are reviewed under these new protocols" announced CATA.
"There is a much greater emphasis on claimants providing documented, contemporaneous evidence. Now, support for a claim depends much less on the ability of a company’s personnel to provide oral evidence of what happened and why. Rather, companies are now expected to have retained project specific, contemporaneously produced and dated documents that provide this information."
The consensus was that CRA reviewers seem to be looking closely for hard, detailed support in the form of planning documents, etc. for the sequence of experiments and analytical work, and how the results contributed to the resolution of the technological uncertainties.
If you have claims currently under review or coming up for review, or if you are filing new claims, it is important that you understand the implications of these changes. CATA suggests that "you cannot assume that you can rely on past experience as a predictor of the outcome of your claims going forward".
For details of the report,link to http://cata.ca/Advocacy/SRED/updates/sred_update_July10.html , or contact your TSI representative for more information on how to better equip your organization to collect and organize documentation in order to improve your success during reviews.