The CRA has quietly made changes to their SR&ED review procedures with no formal announcement. CRA reviewers are now bypassing the Request for Information (RFI) stage and going straight to the onsite meeting.
The RFI has long been one of the first forms of contact a claimant will receive from the CRA to indicate that a review is pending. It was the predecessor to the onsite visit, and gave you the opportunity to gather your documentation prior to meeting with CRA technical reviewers.
More importantly, it was an indicator of what stance the reviewer was likely to take. A reviewer may have issued multiple RFIs, which opens up the dialogue between the reviewer and claimant. The reviewer must engage with their manager at the RFI stage, and their determinations would be reflected in the RFI. Going directly to the onsite meeting takes away that back and forth, which means less prep time for your review.
There are certainly benefits to removing the RFI stage – it streamlines the process and makes the journey to getting your return a lot faster. The claimant will receive a Request for Onsite (RFO) – a notice asking to book the onsite meeting, which will also include some initial assessments the reviewer has made on that claim.
The change has three major implications for SR&ED claimants:
It’s easier now to be caught off guard when facing certain lines of questioning from your CRA reviewer. The back-and-forth at the RFI stage allowed for more preparation, and for ironing out any issues you may foresee with your claim. A consultant who is experienced with reviews will be a huge asset during this process.
This isn’t new, you should always been prepared for a review should it come along. Claimants are not required to submit all their supporting documentation when they first submit their SR&ED claim. It wasn’t until the RFI stage that you would be required to submit this. Documentation collection can be the most time consuming part for many claimants. Now they are moving straight to onsite meetings, and you have to be prepared with your documentation without receiving an RFI first. Work with your consultant to ensure you have all the necessary materials required for your submission.
The CRA is still required to pose their position to the claimant and allow them opportunity to defend it – that hasn’t changed. The difference now is those opportunities are more valuable than before. If you are properly prepared to defend your claim at the time of submission, you should be ready to put your best foot forward during the onsite review.
BeneFACT is Canada’s largest independent SR&ED consulting firm. Call us at 1-855-TAX-BACK (829-2225) to start collecting R&D tax credits today.