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SRED Audit Defense

So, you have been claiming SRED tax credits for a while and are now faced with a CRA review/audit. Whether it’s to provide feedback or to defend your claim, you can leave your worries behind during your SRED Audit Defense. 

Our SRED Audit Defense service is designed to help companies defend their SRED claims during an audit or review by the Canada Revenue Agency (CRA). Our team of experienced professionals understands the SRED program and the audit process and can provide guidance and representation to help your company minimize the risk of losing its SRED tax credits. 

What is SRED Audit Defense?

SRED Audit Defense is a service that helps companies defend their SRED claims during an audit or review by the CRA. Our team of professionals can provide a range of services to support your company, including reviewing and analyzing documentation related to your SRED claims, providing guidance on how to respond to CRA inquiries and requests for information, representing your company during CRA interviews and meetings, preparing and submitting appeals if necessary, and providing expert testimony if required. 

The Purpose of
SRED Audit or Review

The Canada Revenue Agency (CRA) conducts SRED audits or reviews to ensure that companies claiming SRED tax credits have met the program’s eligibility criteria and accurately calculated the amount of the credit. 

The CRA may also conduct an audit or review if there is a concern about the validity of a claim or if there is a perceived risk of non-compliance. The purpose of the audit or review is to confirm that the claimed SRED expenditures are eligible and properly documented and that the work performed meets the program’s scientific or technological requirements.

SRED Claim Reviews are essential for compliance to ensure the efficiency of the tax system. These reviews often cause moments of frustration and panic. Every Canadian taxpayer gets audited every 3-5 years, so don’t worry. 

While many SR&ED claimants can go unaudited for longer than that period, it is fair to expect an audit at some point. It is crucial the taxpayer is prepared and equipped with sufficient resources to successfully go through an audit. 

What You Need To Know
About the SRED CRA Audit

1. It’s a normal government process.

Being selected for any kind of audit by CRA does not indicate that the taxpayer is suspected of any wrongdoings. It’s just a due diligence procedure on CRA’s side.

2. It's you are a first-time claimant, you may receive a first-time claimant advisory service.

Are you a first-time claimant? Most receive a First-Time Claimant Advisory Service (FTCAS). Meaning the claim may be accepted as filed (AAF). During this review, it is important to demonstrate compliance. We support our clients through these common procedures, while our team of experts ensure clients are extensively prepared for this meeting. 

3. If it has been a while since the CRA has contacted you, you may receive a Claimant Advisory Service.

If you are an existing claimant and it has been a while since the CRA has touched base with you regarding the SR&ED program, you may receive a Claimant Advisory Service (CAS) which is similar in nature to an FTCAS. 

4. Timely and accurate responses to the CRA can make a difference.

To begin an audit, the CRA Audits issues the initial request for information (RFI). In most cases, if they receive timely, accurate responses and their inquiries are addressed appropriately, it will result in a completed audit. However, if the CRA auditors request an on-site meeting or issue the subsequent RFIs, there’s no need to worry. We will support you, by attending your meetings with CRA and fully representing your audit defense. 

5. You are not prohibited from applying again in the future if your claim has been declined.

What impact does an audit decline have on future claims? If you have been audited and your claim has been declined by the CRA, you are not prohibited from applying. If all relevant expenditures in fact did occur within the current Fiscal Year and other Fiscal Years under review, and in your opinion SRED activities took place, it is worth making an application. 

Why Are Claims Rejected?

Often, claims are rejected if enough information is not provided, the provided information is not presented accurately to convey the claimant’s position, or the information is not submitted in a timely manner. There are occasions when there is a difference of opinion between the CRA and the claimants. 

How Can We Help?

You can trust EVAMAX during different scenarios:

  • If the claim was not submitted by EVAMAX but you need help during an audit

If the claim is not submitted by us and we are hired to defend a client during an audit, we work with prior information submitted to the CRA by the taxpayer or their representative. Using this information, we build a strong eligibility case. In some exclusive circumstances, we can re-build and re-submit the claim if time permits. This depends on the timeline arranged between the claimant and CRA. 

  • If you need to re-draft your original submission

We identify gaps and omissions in the original submission and will collaborate with you to gather, re-structure and prepare responses and generate the additional information required and provide CRA with the necessary documentation to fully match it with eligibility requirements.

  • If the audit outcome is not what you expect

There are many reasons why the audit outcome is not as expected by the claimant. We not only handle the submissions of information, but we use the several recourses available to defend the SRED Claim. For example, requesting additional reviews, and filing objects or appeals. 

  • If you need to coordinate with the CRA 

The first step is to open communication channels with the CRA. 

  • If you need the best possible advice from funding experts

We will listen to your thoughts and concerns and will share our insight on the best way to proceed. 

  • If you need expert help all the way 

Each case is different and it’s imperative to have an experienced consultant supporting you through the process. 

Why Choose Our SRED Audit
Defense Service?

We offer several advantages to our clients, including:

Experience: Our team of professionals has 20+ years of experience working with companies on SRED claims and audits.

Expertise: We have a deep understanding of the SRED program and the audit process, and can provide guidance and support tailored to your specific situation.

Results-oriented: We focus on delivering results for our clients and work to minimize the risk of losing SRED tax credits.

Proactive approach: We take a proactive approach to SRED claims and audits, and can help your company identify and address potential issues before they become problems.

Cost-effective: We offer competitive pricing for our services and can help your company save money.

Our team at EVAMAX is fully committed to providing services which are fully compliant, both technically and financially, with the current CRA requirements, for our valuable clients and taxpayers. We provide you with up-to-date recommendations on how to better plan and present your work in the SRED claim for current and future fiscal years.

We deliver long-term financial success to our clients while maintaining a strong relationship with CRA.

FACING SRED AUDIT? ​

Get a second opinion or get help with your SRED audit defense

Contact us today to learn more about our SRED Audit Defense services and how we can help your company defend its SRED claim. 

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