Boast Capital, an Alberta-based Scientific Research and Experimental Development (SR&ED) consulting firm, has released their review of the long awaited Taxpayers’ Ombudsman Report (PDF) on the administration of the SR&ED program by the Canada Revenue Agency (CRA).
Last year, the Taxpayer’s Ombudsman launched a systematic investigation as a result of complaints filed by claimants, the concerns raised by stakeholders, and the program’s national scope and potential impact on a significant part of the SR&ED community. The investigation focused on questions of service, such as the sufficiency and timeliness of the CRA’s communication to claimants, as well as issues of administrative fairness: essentially, whether the CRA is administering the SR&ED program in a manner consistent with the service rights specified in the Taxpayer Bill of Rights.
The Ombudsman Report, released last week, was to provide results of its investigation on complaints that fell within the definition of their mandate to uphold the Taxpayer Bill of Rights and to promote professional service and fair treatment by the CRA; however, due to lack of formal complaints about the SR&ED program, the report was lacking in its recommendations.
“It is not hard to see why SR&ED claimants didn’t want to go on record and file formal complaints,” said Alex Popa, General Partner, Boast Capital LP. “All claimants want to have a good cordial relationship with the CRA and especially the CRA SR&ED reviewers since the success of many R&D projects depends on the claimants receiving SR&ED Investment Tax Credits.”
In closing, The Ombudsman Report suggested that the CRA should be assessing SR&ED claim eligibility based on the Income Tax Act and not the narrow definitions and documentation requirements, which have been recently imposed on claimants.