You’ve just submitted your first SR&ED tax credit claim and naturally, you’re feeling a bit anxious. Will you get audited?
A few months later, you receive a call from an SR&ED auditor at the CRA, wanting to talk. Your mind may race with questions: Are we eligible? Were our project descriptions written correctly? Did we calculate everything right? It’s completely normal to feel a bit overwhelmed.
Here’s the good news: you probably shouldn’t be too worried. You may have been selected for a “FTCAS”, which stands for First Time Claimant Advisory Service.
About ten years ago, the CRA introduced FTCAS to provide guidance to businesses claiming SR&ED for the first time, or those that haven’t claimed in over three years.
The Good News: If you’re selected for FTCAS, it means your recent SR&ED submission has been accepted as filed, meaning you’ll receive the tax credit you’ve claimed. CRA is not going to audit or negotiate your claim.
The Not-So-Good News: If your FTCAS meeting doesn’t go well, you could be at a higher risk for an audit next year. While the meeting should be straightforward, CRA might start asking questions that feel more like an audit. This can be nerve-wracking, especially if you’re not familiar with SR&ED policies. Having an SR&ED expert or consultant present during the meeting can really help ease the pressure.
A Word of Caution:
Not all first-time claimants qualify for FTCAS. The CRA decides who gets this service based on perceived eligibility and risk, meaning some may face a full audit instead.
If you get that call from the CRA, be sure to ask: “Is this an FTCAS meeting or a full audit?” If it turns out to be an audit, seeking professional help is crucial. An SR&ED consultant can assist you in gathering essential documentation, such as timesheets, invoices, contracts, and evidence of systematic investigation.
If CRA starts challenging your eligibility, it can feel overwhelming, almost like you’re speaking a different language. It might seem like the reviewers aren’t listening, but they’re focused on a different understanding of eligibility.
To navigate this complex process and safeguard your future benefits, consider partnering with an expert who knows the ins and outs of SR&ED claims. The team at RDP Associates is here to support you, ensuring you’re prepared and confident every step of the way. We have been assisting with SR&ED claims since 1987 and have prepared over 10,000 claims. Don’t hesitate to reach out—we’re ready to help!
Click here to learn more about our SR&ED services.