Once the CRA reviewers have looked over your claim and received as much of the requested information that they think they are likely to get, they will either accept the claim as filed, or they will write a proposal to amend the claim. The claimant normally has 30 days to tell them in what way the proposal errs. This can lead to further discussion and may even lead to modification of the proposal. At this stage it is key to offer new information if possible. A CRA reviewer is like you and me: he doesn’t want to look stupid. Once he has committed his position in writing, it is easier to change his proposal if he can say “If only I had known this new information in the first place, I would have made a different proposal.”
If, as a claimant, you don’t agree with the outcome, you and your representative may discuss it with the reviewer’s supervisor, and if you still don’t agree, you may request an administrative review. Here someone else outside the audit group that did the review will take a fresh look at your claim. These steps are not available to you once the reviewer has “closed the file”, so don’t procrastinate.
In the event that you still think you are right and CRA is wrong, you may file a Notice of Objection within 90 days of the date of CRA mailing the Notice of Assessment or Notice of Reassessment. We tend to discount this step. CRA seems to be about 3 years behind in processing SRED appeals. I think that the reason is that over that past few years there has been about a HUGE increase in the number of appeals.
If CRA does not resolve the appeal within 90 days of the Objection being filed (and we don’t think we have ever seen any resolved that quickly), you can then appeal to Tax Court, which you can also do within 90 days of CRA mailing their verdict on the Notice of Objection.
This doesn’t mean that you should take the Notice of Objection step lightly. Your Objection should read like pleadings to the Court since it will be evidence later.
Avoid a SR&ED dispute. Contact us to find out how we can help.