If you are not satisfied with the proposed outcome of your SR&ED claim you have the option to request what is referred to as an Administrative Review (AR). This would be the last step prior to filing a Notice of Objection thereby beginning the appeal process.

Before requesting an AR you are expected to have discussed your concerns with management including the Research and Technology Manager (RTM) and Financial Review Manager (FR). If you are still unsatisfied you can request an AR, which is normally conducted by a SR&ED Assistant Director (AD).

Importantly, you have to request the AR prior to the processing of the claim. Therefore, timing is key and requesting an AR once the re/assessment is issued is too late. At that point CRA will not reconsider your SR&ED claim without the filing of a Notice of Objection. So, once you have received the audit/review proposal you should then request the AR.

In the past a letter to the AD expressing your concerns, while also notifying the RTM/FR of the request, was the normal practice. Depending on the AD you would receive a detailed consideration of your complaints or what amounted to a standard form letter.

Recently, CRA has moved to standardize the AR process and has implemented Form RC532, Request for Administrative Review. Also, CRA's Guidelines for Resolving Claimants' SR&ED Concerns has been updated to reflect the new procedures.

Form RC532 has to be sent to a central area within CRA for processing, the National SR&ED Administrative Review Intake Centre. You must include the reason you are requesting an AR and also describe your efforts to discuss your concerns with the Research and Technology Advisor (RTA) and Financial Reviewer (FR) (members of the SR&ED audit team). As well, you are expected to describe related discussions with the RTM and FR.

The AD is expected to determine whether or not:

1. The claimant was given due process and

2. The SR&ED technical and financial reviews were consistent with the current SR&ED legislation, policies and procedures.

If after a review of the facts, in our experience, a claim can be argued as both compliant and non-compliant then it is likely that CRA will find non-compliance. Therefore, it is crucial that your claim is described correctly and the key SR&ED criteria are supported through documentary and oral evidence.

CrossDynamix is the industry leader in filing and defending SR&ED claims as well as appealing the CRA's SR&ED assessments. Contact us for a free consultation.

www.cra-arc.gc.ca/txcrdt/sred-rsde/pblctns/rc532-fill-16e.pdf?utm_source=sred&utm_medium=eml

http://www.cra-arc.gc.ca/txcrdt/sred-rsde/pblctns/p2000-02r-eng.html