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Updated CRM For RTAs Part Six: Written Review Plans

February 12, 2016 SRED

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SRED written review plan — Written SR&ED review plans help applicants and the CRA alike to chart a successful course.

Research and Technology Advisors (RTAs) at the Canada Revenue Agency (CRA) often use a written review plan to frame and present their take on issues within a Scientific Research and Experimental Development (SR&ED) application. This plan also outlines the methodology to resolve these issues. In an effort to maintain quality and consistency throughout the program, higher-ranking CRA officials can then use this document to easily supervise the process undertaken by the RTAs.

This sixth article on the revisions contained within the Updated Claim Review Manual (CRM) for RTAs will address:

Situations where a plan may not be required;
Approval of review plans; and
Adjustment of the scope of the review.

Read the other articles in this series: Part One: Clarified Definitions; Part Two: First Time Claimant (FTC) Review vs. FTCAS; Part Three: ATIP and Information Requests; Part Four: Information Gathering by RTAs; and Part Five: SR&ED Claim Review Process and Project Issues.

What is a Review Plan?

As explained within the updated CRM, the review plan is not a legal document and is intended to only be used internally at the CRA, although relevant information should be shared with the SR&ED applicant (emphasis added):

A review plan is a tool to guide the RTA, but it does not bind them. It indicates the RTA’s intentions based on an examination of the available information from the claim and other possible sources including preliminary discussions with the claimant, if any occur.

The review plan is an internal document that should not be given to the claimant. Among other things, it often contains information about risk assessment. In most cases, though, the review plan would be available under Access to Information and Privacy (ATIP) once the proposal package is sent. It should be noted, however, that the elements of the review plan that are important for the claimant must be communicated to the claimant at an early stage of the review.¹

Exempted Situations

As the new CRM states, most SR&ED application review situations call for the preparation of a written review plan to document application issues and possible solutions identified by the RTA. There are a few situations, however, which may be exempted from this practice.

Although this information was briefly mentioned in earlier versions of the CRM, the updated CRM expands on this topic in more detail. The exempted situations are listed as follows in Section 4.8.1:

At the initial stages of a review, the application is so lacking in basic information that an information request is needed as the first step. When this information is obtained, a written review plan would then be made. However, if the information is not obtained, and the SR&ED application is considered unsubstantiated, a review plan would not be required.

There was a PCPR for the year(s) under review, and the claimant was given a written PCPR report. If the work on the PCPR was extensive enough, the RTA would only need to verify that the work claimed was performed as discussed during the PCPR, and document their work. This is discussed in Chapter 5.5.1. If this verification indicates that the claimed work was not the same as what was discussed during the PCPR, the procedures of a regular review may be necessary.

All the issues identified by the CF and any others identified by the RTA can be readily resolved without claimant contact.

The RTA accepts the claim as filed without any claimant contact. .²

Even in these situations, section 4.8.1 also stipulates that the RTA or higher-ranking officials may still call for the creation of a review. If the RTA does not create a review plan, they are still required to explain this decision in a written document that explains “all the work done, what the issues were (if applicable), how the issues were resolved (if that is possible), the determinations and other decisions, and the rationale.

Plan Approval

As with any official procedure, the review plan outlines a process that needs to be approved by the Research and Technology Manager (RTM) before the start of the review. The updated CRM explains the purpose and intent behind the approval step (emphasis added):

The RTM may suggest additional review issues, want other elements in the review plan, or suggest that some issues do not need to be reviewed in detail. The intent of the approval is not to review all the details of the plan but to ensure the overall scope of the review is appropriate. The RTM may delegate this approval.

It is also recommended that the RTA inform and consult the RTM in certain atypical circumstances which may affect the review process or the CTSO’s resources. Examples of such circumstances may include, but are not limited to review plans that involve:

unusually large, complex or contentious claims;

significant human or financial resources, or travel expenditures; or

consultation and coordination with other areas of the CRA.

In addition, it is recommended that RTM consultation be required for new RTAs. The intent of this is to allow RTMs to provide training and support to new RTAs.³

SR&ED reviews are a fluid and dynamic undertaking, and the process outlined above allows the RTMs to effectively supervise their RTAs. This helps to enforce quality control and consistency in the CRA’s interactions with applicants all across Canada.

Adjustment of Review Plans

The CRM tells us that an RTA can add, remove, or modify review issues that were identified during the initial planning stage. Although this was part of practice for some time, the update helps us clarify expectations and aids applicants in mentally preparing for the experience of a review.

Furthermore, the updated CRM now clearly states that – regardless of how significantly the RTA adjusts the scope of the review – the applicant must be informed of these changes:

Whenever the actual or contemplated work differs substantially from the review plan, the claimant must be advised that new issues/ more work will be reviewed, and the financial reviewer (FR) must be informed. It is also recommended that this be communicated to the RTM and, where the changes are material in nature, RTM approval of the amended review plan is required.⁴

Updated CRM & Written Review Plans: Summary

As opposed to older versions, the updated CRM more closely reflects the real-world practice of RTAs. This is a huge advantage, as it allows SR&ED applicants to predict and prepare their expectations and resources according to insights within the CRM. Understanding the preparation and function of the written review plan makes it easier to identify the potential for miscommunications (i.e. incorrectly identified issues) before the review is even undertaken. This is especially true for new applicants or applicants working with new RTAs.

A better grasp of the exemptions to a written review plan also gives applicants some protection from overzealous RTAs, thus saving precious time and improving trust in the CRA’s capability to offer an efficient, fair, and consistent experience. After all, the CRA didn’t reach their 90%+ success rates in resolving review applications by lacking in benchmarks of quality.

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.