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Bulletin # 43 CRA Announces New Internal Procedures for SR&ED Audits
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Bulletin # 43 CRA Announces New Internal Procedures for SR&ED Audits

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In May 2010, CRA announced that it was implementing significant changes in its methods for …

In May 2010, CRA announced that it was implementing significant changes in its methods for
auditing SR&ED claims.
Here are some links to CRA’s website that describe this in more detail:
Announcing the new audit methods coming into affect May 1, 2010, and also that the
procedures will be made public in April 2010:
http://www.cra-arc.gc.ca/txcrdt/sred-rsde/pblctns/clmrvw-eng.html

Published in: Business, Technology

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  • 1. TM Scitax Advisory Partners LP R & D Ta x C r e d i t S p e c i a l i s t sBulletin DIRECTORS: David R. Hearn, Managing Director Michael C. Cadesky, BSc, MBA, FCANUMBER 43 | MAY 3, 2010 CRA Announces New Internal Procedures for SR&ED Audits In May 2010, CRA announced that it was implementing significant changes in its methods for auditing SR&ED claims. Here are some links to CRA’s website that describe this in more detail: Announcing the new audit methods coming into affect May 1, 2010, and also that the procedures will be made public in April 2010: http://www.cra-arc.gc.ca/txcrdt/sred-rsde/pblctns/clmrvw-eng.html Announcing that the public release of information on the new procedures will be delayed until June 1, 2010: http://www.cra-arc.gc.ca/txcrdt/sred-rsde/pblctns/clmrvw-100430-eng.html It is generally expected that these methods will be more thorough and demanding (esp. with respect to requirements for supporting documentation and time records) than those previously in use. It is also expected that CRA management will enforce far more uniform adoption of these new procedures across the country than in the past. As a background to this, it is worth noting some important shifts in CRA’s “political” operating environment. Consider the following: • In late summer 2009, the Taxpayers’ Ombudsman launched a “systemic inquiry” into CRA’s management of the SR&ED program. His report was originally due out in March 2010, but has now been delayed until July 2010. It is generally expected that the Ombudsman’s report will be critical of CRA’s administration of SR&ED in recent years. • In addition to the Ombudsman, there has been another independent inquiry into SR&ED administration by an outside consultant (Mueller et al) hired by the Minister’s office. Since this report may be on its way to cabinet, its contents have not – and likely will not – be made public.
  • 2. • The minister in charge of CRA (JP Blackburn) was “shuffled” to a new portfolio within 24 hours of appearing at an SR&ED event held by CRA in Burlington in January 2010. For more information on this topic, contact: David R. Hearn, Managing Director, Scitax Advisory Partners (416) 350-1214 or dhearn@scitax.com About Scitax... Scitax Advisory Partners is a professional services firm with specialist expertise in Scientific Research and Experimental Development (SR&ED) tax credits. We offer a team of senior technical consultants all of whom have ten or more years experience in the SR&ED field. All Scitax technical consultants have engineering or science backgrounds and at least twenty years industry experience in their particular field prior to consulting. Our primary function is to produce a technical submission package that most effectively communicates your SR&ED claim to CRA in a way that highlights eligibility and expedites processing. We assist you in identifying and preparing all required documentation including project technical descriptions, cost schedules, and everything else your tax preparer needs to file the claim. Once your claim is filed, Scitax will advocate for you with CRA and help you negotiate fair settlement of your claim. While we normally work with our clients existing tax advisors, our affiliated firm Cadesky and Associates can provide a full package of tax services if required. TM Scitax Advisory Partners LPDirectorsDavid R. Hearn, Managing DirectorMichael C. Cadesky, BSc, MBA, FCAScitax Advisory Partners LPTD Centre, 77 King Street West, Suite 2401, Toronto | 416-350-1214 | www.scitax.comDisclaimerThis bulletin is provided as a free service to clients and friends of Scitax Advisory Partners and Cadesky and Associates. The content is believed tobe accurate and reliable as of the date it is written, but is not a substitute for qualified professional advice.© Copyright Scitax Advisory Partners LP, 2009. All rights reserved. “Scitax” is a trade-mark of Scitax Advisory Partners LP.