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On April 10, 2012 the Canada Revenue Agency published a revised version of a guide initially created to assist claimants to identify the appropriate supporting documentation for their SR&ED claim from a technical standpoint. As such, this guide presents various methods that can be considered as acceptable by the CRA to support a claimant’s project.
“If from the review of the T661 project description the CRA determines that the work claimed potentially meets the definition of SR&ED, or the risk of the work not being SR&ED in a material sense is low, then the work may be accepted as filed.” (1) The form must demonstrate the specifics and boundaries of the project. In order for the CRA to consider the technical information compiled within the T661 form to be acceptable, the CRA should be able to:
• “Determine that the work claimed potentially meets the definition of SR&ED;
• Determine the risk of the work not being SR&ED in a material sense; or
• Determine whether more information or a more detailed review is required.” (2)
Desk Review of SR&ED
Once the risk management assessment has been completed, the CRA may require “one or a combination of the following: assess the eligibility of the claim, verify that the work claimed was performed and when, and/or assess that the expenses related to the work done are reasonable.” (3) In cases where the risk level is considered higher or the CRA requires additional information, the CRA may request a desk review where they visit the premises where the SR&ED work is being conducted. The CRA will often review such supporting documentation as planning documents, test records, resource allocation records and other data.
In all cases, it is critical that the claimant does not get discouraged by missing or incomplete documentation. Since the SR&ED claim process is a collaborative effort, it is recommended that the CRA or a SR&ED specialist be contacted as soon as possible in the SR&ED claim process. The CRA also offers “several client-focused services, such as the Preclaim Project Review (PCPR) and the Account Executive services”. (4)
(1-4) Lifted 10/06/12: http://www.cra-arc.gc.ca/txcrdt/sred-rsde/pblctns/clmnts-eng.html