CRM for RTAs information gathering

Research and Technology Advisors (RTAs) have new information-gathering powers within the Scientific Research and Experimental Development (SR&ED) program. While our last blog post dealt with the newly specified avenues for access to information by claimants, this article discusses additions to the Claim Review Manual (CRM) that grant RTAs with more access to a claimant’s file information, ratified either through existing legislation or through judgments in court cases.

Specifically, this post will address:

  • New information added to data requests by RTAs to claimants; and

  • RTA ability to access information from third parties.

Please note that this post deals only with communication from an RTA to a claimant when additional information is required to process their claim. For readers wishing to educate themselves on guidelines regulating the acquisition of information from Taxpayers, Registrants, and Third Parties, the full text of the document is available here.

Read the earlier installments of this series here on SREDucation.ca: Part One: Updated Definitions, Part Two: First Time Claimant (FTC) Advisory Service vs. FTC Review, and Part Three: ATIP & Information Requests.

Expected Timelines for Claimant Responses to RFIs

Prior to the recent revisions to the CRM, the manual stipulated that requests for information by a claimant could only be made via phone calls or written letters. However, it can be difficult to track a letter from the date it was sent by to the date it was received or read. These dates are essential to establishing the expected timeline for responses.

The Canada Revenue Agency (CRA) has now partly put those problems to rest by clearly outlining the time available for responses when an RTA contacts a claimant by letter (emphasis added).

Request for Information (RFI) letters ask the claimant to provide the information by a specific date. The Act (231.2(1)) allows taxpayers reasonable time to comply with requests for information. Normal practice, as described in the CRA Audit Manual, is to allow a minimum of 30 days from the date of the letter, although the claimant can agree to less time, and should be advised that providing the information sooner may speed the review. The request should be as specific as possible so that the claimant understands what is required. It is not recommended that claimants be asked to revise and resubmit their project information. If the claimant requests an extension of time, an additional 15 days can be given to provide the information. 1

RTA Considerations When Requesting Information

As a measure of transparency, and possibly to clarify expectations for first-time claimants who receive official communication from RTAs, the CRA has now added a new section detailing points that RTAs must keep in mind when requesting information from claimants (emphasis added):

  • Explain the SR&ED Program review process, the various services that are available and the Dispute Resolution Policy.

  • Ask them if they have any questions or if they require additional information to understand the SR&ED Program. This assistance can be provided during an on-site visit.

  • Explain the relevance of the requested information in the RFI, such as why the information is needed with respect to either the eligibility of the project or the scope of the eligible work, or planning the review.

  • Be transparent and clear on issues identified that require resolutions in the review.

  • Be specific and relate the requested information to issues identified. 2

Gathering Information From Third Parties

The guidelines for RFIs outlined above suggest that the majority of the information passing from a claimant to the RTA is funnelled solely through the claimant or an authorized representative. However, the updated CRM now grants RTAs with approval to obtain information from a third party, if and where required.

Section 5.4.2 of the CRM explains the legislative basis behind approaching third parties with confidential information regarding the taxpayer, and why this would not violate the privacy rights of the taxpayer (emphasis added):

CRA has the legal authority to request information from third parties. The legislative basis of this power is subsection 231.1(1) of the Act, in particular the phrase “…or of any other person that relates or may relate to…the books or records of the taxpayer…”.

Subsections 241(4) (a) and (b) of the Act allows an official to “provide to any person taxpayer information that can reasonably be regarded as necessary for the purposes of” “…the administration or enforcement of this Act…” (a) or “determining any tax, interest, penalty or other amount that is or may become payable by the person, or any refund or tax credit…” (b). In practice, when contacting third parties, the reviewer would reveal the minimum amount of information possible, such as the taxpayer’s name and the fact that an SR&ED review is underway. This does not violate subsection 241(1) of the Act, which prevents unauthorized disclosure of taxpayer information, because this disclosure is authorized.  Subsection 241(4) of the Act indicates generally the situations where taxpayer information may be disclosed, not just to third parties.

Information can even be requested from lawyers where that information is not subject to solicitor-client privilege. The CRA Audit Manual Chapter 10.6 and Communiqué AD 10-01 Acquiring Information from Taxpayers, Registrants and Third Parties discusses requests for information from third parties.

One example of where this might be done is in the case of third party payments. As indicated in the documents noted above, RTAs must be careful when making requests from third parties. Such requests are not routinely done, as the onus is always on the claimant to supply needed information.

All information requests from third parties should be made in coordination with the FR [Financial Reviewer].3

Information Gathering By RTAs: Summary

The CRA has gone to great lengths to establish an attitude of transparency and information-sharing through the new changes in the Claim Review Manual for its RTAs. They have also moved toward much more specific language and examples to avoid unnecessarily confusing or tense interactions between claimant and RTAs — listing the types of information that can be requested and accessed by RTAs, mandating timelines for written responses to RFIs, and so on.

Please see the other articles in our “Updated CRM for RTAs” series to ensure that you enter into any future interactions with RTAs as a well-informed claimant.

This article is based on CRA policy documents available at the date of publication. Please consult the CRA website for the most recent versions of these documents.

Have experiences of your own regarding communication between claimants and RTAs? Contribute to the conversation on our LinkedIn group.

Share your insight and thoughts by commenting below, or adding to the conversation on our LinkedIn group, Facebook page or Twitter.

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Show 3 footnotes

  1. Canada Revenue Agency. (20 April, 2015). Request for Information by Letter. In Claim Review Manual for Research and Technology Advisors (Chapter 5.4.1.2). Retrieved November 22, 2015, from http://www.cra-arc.gc.ca/txcrdt/sred-rsde/pblctns/clm-rvw-mnl-chptr5-eng.html#N103FA
  2. Canada Revenue Agency. (20 April, 2015). Working with Claimants when Requesting Information. In Claim Review Manual for Research and Technology Advisors (Chapter 5.4.1.3). Retrieved November 22, 2015, from http://www.cra-arc.gc.ca/txcrdt/sred-rsde/pblctns/clm-rvw-mnl-chptr5-eng.html#N10478
  3. Canada Revenue Agency. (20 April, 2015). Information Requests from Third Parties. In Claim Review Manual for Research and Technology Advisors (Chapter 5.4.2). Retrieved November 22, 2015, from http://www.cra-arc.gc.ca/txcrdt/sred-rsde/pblctns/clm-rvw-mnl-chptr5-eng.html#N104A4

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