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It often feels as though you’re speaking two different languages. The reality is … you probably are. Protect your investment by ensuring that you are conscious in your use of language and communication with the CRA by considering the following points.
Broken Communication: Language Is Imperfect
In Politics and The English Language, George Orwell criticizes “ugly and inaccurate” contemporary English language… back in 1945. The English language has continued to evolve (or devolve, depending on one’s view) since that time.
While all parties in an SR&ED review may be speaking English,
We may all speak the same language (English, French, etc), as a group we often forget that everyone has their own interpretations when it comes to certain words. Our experiences, cultural background, work environment and education all have a significant impact on what we project onto any given concept. This imperfection of language – which is perhaps exacerbated by the imperfection of the English language as a whole – can make a SR&ED review even more difficult.
With the pressure on the CRA to process as many files as possible yet reduce the “risk” by periodically review files that have been flagged as “high risk”, it’s no wonder they are feeling pressed for time. When one is pressed for time – which most companies CTO, CEO, and CFOs usually are – the consideration that goes into word choice in spoken or written language is often minimal. How often do we stop to think, does this term mean the same to the listener as it does to me?
We All Have Our Own Definitions
When out speaking to business owners, I often describe my role less as a paperwork pusher, and more as a translator. Common terms that are used in the private sector have considerably different meanings in the private sector. In fact, we’ve written about the [INSERT LINK] red flag words [/] that you should avoid in your claims, but that’s simply scratching the surface. There are countless other terms that are used that have different interpretations.
Define Your Terms; Define Your Constructs
One of the most frequent ones that arise in SR&ED is “Technical” vs. “Technological”.
It’s important to note the definition of “technical” and “technological” appear throughout such documents as IC86-4R3, but with slightly different nuances. (To be exact, the term technical appears 28 times, while the term technological appears 123 times in the 15-page document; however, neither term is defined in the 2-page glossary). A company may have a technological or technological uncertainty, but an advancement (which is one of the three criteria for judging eligibility) must occur at the technological level.
When you are speaking to the CRA, are you using terms that have the same meaning for them as they do for you? When you use a new term, have you adequately defined it in order to prevent any misconceptions?
This defining of terms that are not tangible (ex. “intelligence” as intangible, “fish” as tangible) is critical in order to ensure your success. In qualitative research, this is known as defining your “construct”.
In a scientific theory, particularly within psychology, a hypothetical construct is an explanatory variable which is not directly observable. For example, the concepts of intelligence and motivation are used to explain phenomena in psychology, but neither is directly observable.Cronbach and Meehl (1955) define a hypothetical construct as a concept for which there is not a single observable referent, which cannot be directly observed, and for which there exist multiple referents, but none all-inclusive.
- Language is Imperfect;
- We All Have Our Own Definitions;
- It’s Easiest To Come To an Understanding In Writing;
- Written Documents Are More Reliable – Ask For Them
- Tax Court of Canada is precise – refer to them.
At The Outset
The first part of the review – the request for a meeting – is when the requirement to have communication in writing should