As part of our ongoing development work on the Comprehensive Guide to SR&ED, we regularly review and update pages that may have become outdated. In doing so, an interesting point was noted with regards to the changes to the SR&ED Claim Review Manual (CRM).

When the CRA released their new version in 2015, they indicated a list of changes in the Appendix. These include the following:

Appendix B.1: Revisions

1. 1 Explanation of changes

The following are the explanation of changes to the Claim Review Manual (CRM) for Research and Technology Advisors (RTAs) as part of the revision of April 21, 2015.

Chapters 1 and 2 have been revised to clarify Agency guidelines regarding compliance approaches, email communications and Access to Information and Privacy (ATIP) in addition to clarifying definitions for “determination”, “conclusion” and “decision”.

Chapter 3 has been revised to include information on joint technical-financial issues.

Chapter 4 has been revised to include information on risk assessment and review issues in addition to clarifying procedures regarding review plan requirements and approval. The section on “claims involving a large number of projects” was clarified. The section on “consideration for large claims” was deleted. The first-time claimant advisory service (FTCAS) service is also included.

Chapter 5 has been revised to clarify procedures regarding requests for information (RFI), reviews with or without onsite visits, and communicating decisions to the claimant to improve transparency and consistency. In addition, new sections describing FTCAS and claimant’s supporting evidence and oral information have been added. 1 (Please note that there is a SREDucation single-page version of the Claim Review Manual for RTAs available for your convenience)

CRM for RTAs: 2011 vs. 2015

Previously, Section 6.8.11 of the CRA’s CRM provides that an RTA’s Technical Review Report will be reviewed by an RTA in certain situations to ensure “quality”.

The first version of the manual (2011) provides the following information:

6.8.11 Signatures / Report Review

The SR&ED Review Report must be signed by the RTA. There is also a place for the RTM to sign to indicate their acceptance of the report. The RTA must consult the RTM and obtain the RTM’s acceptance in review cases where any one of the following scenarios applies:

  • the claim is found completely ineligible or substantially ineligible;
  • there is a significant change in eligibility of claimed work from the prior year’s review;
  • the claimant does not concur with the RTA’s findings; or
  • the scope of the actual review is significantly different than what was planned based on the issues identified during screening and risk assessment.

The RTA is responsible for the quality of their work and reports. The RTM has additional responsibility for the quality of SR&ED reviews and SR&ED Review Reports delivered by their work unit. The RTA must therefore comply with any quality assurance procedures at a local, regional and national level.

Review of SR&ED Review Reports by the RTM is a key element in ensuring quality. The RTM’s signature indicates that the review and the SR&ED Review Report have been reviewed against the standards set out in the CRM and that they comply with the standards of the SR&ED Program.

RTAs may also have their reports reviewed by their co-workers (peer review) prior to the completion of the report.2

The current version of the manual (2015) provides the following information (changes appear in green):

6.8.11 Signatures

The purpose of this section is to:

  • confirm authorship of the SR&ED review report by the RTA; and
  • confirm approval by the RTM.

The SR&ED review report must be signed by the RTA. There is also a place for the RTM to sign to indicate their approval of the report. The RTA must consult the RTM and obtain the RTM’s approval in every review. The approval of the review report by the RTM indicates that management agrees with and supports the determinations, conclusions, and decisions made by the RTA.

The RTA is responsible for the quality of their work and reports. The RTM has additional responsibility for the quality of SR&ED reviews and SR&ED review reports delivered by their work unit. The RTA must therefore comply with any quality assurance procedures at a local, regional and national level.

The review of SR&ED review reports by the RTM is a key element in ensuring quality. The RTM’s signature indicates that the review performed by the RTA and the SR&ED review report have been reviewed against the standards set out in the CRM and that they comply with the standards of the SR&ED Program.

RTAs may also have their reports reviewed by their co-workers (peer review) prior to the completion of the report. The procedures for this, if it is done, would be set by the local coordinating tax services office (CTSO).3

Changes to the CRM for RTAs – The Unanswered Questions

The changes highlighted above are interesting from a number of perspectives:

  • Why weren’t these changes included in Appendix B as an update? Is it simply that the updates to Chapters 6-8 were left off?
  • Why has there been a shift to requiring approval in every review? Or has this always been the case, it’s just the original CRM was incorrect?
  • Is the statement “The approval of the review report by the RTM indicates that management agrees with and supports the determinations, conclusions, and decisions made by the RTA” intended to discourage taxpayers from speaking to the RTM? If so, why is this being discouraged when it is part of the Guidelines for Resolving claimants’ SR&ED concerns:

    If the claimant’s concerns are not resolved to their satisfaction after discussions with the RTA and / or FR, then the second step is for the parties to involve the Research and Technology Manager (RTM) and / or Financial Review Manager (FRM). The RTM and / or FRM will review the facts of the case and consider the claimant’s perspective on the issues, as well as those of the RTA and / or FR.4

  • There is the addition of the new phrase — “The procedures for this, if it is done, would be set by the local coordinating tax services office (CTSO).” Is this to shift the responsibility to another area? Where can a taxpayer find information on the local procedures and the differences between procedures in other areas?

Some interesting questions to consider. At this time, there seem to be no answers on the CRA website.

Changes to the CRM: Summary

The above outlines the importance of reviewing CRA SR&ED program updates carefully. This nuanced change would not have come to light if we hadn’t been updating our Comprehensive Guide to SR&ED and noticed a few discrepancies. There are a few other differences, which we’ll highlight in the weeks to come.

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

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 4 footnotes

  1. CRA. (2015, April 21). Claim Review Manual for Research and Technology Advisors. Retrieved August 6, 2015, from http://www.cra-arc.gc.ca/txcrdt/sred-rsde/pblctns/clm-rvw-mnl-ppndcs-eng.html#ppx2_1_1
  2. SREDucation. (2015, March 31). Claim Review Manual for RTAs (ARCHIVED). Retrieved August 6, 2015, from https://www.sreducation.ca/claim-review-manual-research-technology-advisors/
  3. SREDucation. (2015, June 3). Claim Review Manual for RTAs. Retrieved August 6, 2015, from https://www.sreducation.ca/claim-review-manual-research-technology-advisors-2/
  4. CRA. (2005, June 30). Guidelines for Resolving claimants’ SR&ED concerns. Retrieved August 6, 2015, from http://www.cra-arc.gc.ca/txcrdt/sred-rsde/pblctns/p2000-02r-eng.html

Elizabeth Lance

Elizabeth is known as the "SR&ED Maven" in the industry. With a love of documentation and the nuances of language, she is often engaged by multi-million dollar companies to help improve documentation and workflow processes. Her favourite sentence (which she hears regularly) is "Accepted as Filed". Find out more about her on LinkedIn.

3 Comments

Sam Metalin · September 11, 2015 at 1:47 pm

Dangerous omission to 6.8.11

Almost every RTA report I’ve seen is signed on same date by the RTA and the RTM. Most RTA reports are pprovides to the claimant AFTER the date that the RTM has approved the report.

This in turn suggests that, in the case of an adverse finding by RTA the RTM has not had any opportunity to review any of the claimant’s

Sam Metalin · September 11, 2015 at 1:54 pm

Dangerouus omission to 6.8.11 (cont’)

concerns or replies to the draft report of the RTA (if such actually exists).

Since the first level of “appeal” is to the RTM, that indicates a strong apprehension of bias on the part of the RTM, as the RTM had approved the report by his/her subordinate before the claimant had a fair chance to respond.

    Elizabeth Lance · September 11, 2015 at 2:07 pm

    Hi Sam,

    That’s very interesting – I had not thought to check the dates on the signatures. I have seen that they are often provided to claimants AFTER being approved, which leaves very little room for companies to discuss their concerns in a constructive manner.

    ^EL

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