{"id":3143,"date":"2018-12-08T16:39:02","date_gmt":"2018-12-08T16:39:02","guid":{"rendered":"https:\/\/rdactionconsultant.com\/?p=3143"},"modified":"2025-11-27T18:29:47","modified_gmt":"2025-11-27T18:29:47","slug":"sred-audit-meeting","status":"publish","type":"post","link":"https:\/\/rdactionconsultant.com\/en\/blog\/sred-audit-meeting\/","title":{"rendered":"SR&#038;ED Audit meeting"},"content":{"rendered":"<div class=\"vgblk-rw-wrapper limit-wrapper\">\nThe audit by the CRA is certainly THE crucial moment in the claiming process for SR &amp; ED tax credits. We cannot avoid an audit, but we can certainly minimize it\u2019s negative impacts.\u00a0In earlier articles in this series <strong><a href=\"https:\/\/rdactionconsultant.com\/en\/?p=2333\" target=\"_blank\" rel=\"noopener\">here<\/a><\/strong>, <strong><a href=\"https:\/\/rdactionconsultant.com\/en\/?p=486\" target=\"_blank\" rel=\"noopener\">here<\/a><\/strong>, <strong><a href=\"https:\/\/rdactionconsultant.com\/en\/?p=408\" target=\"_blank\" rel=\"noopener\">here<\/a><\/strong>,\u00a0\u00a0<strong><a href=\"https:\/\/rdactionconsultant.com\/en\/?p=984\" target=\"_blank\" rel=\"noopener\">here<\/a><\/strong>, <strong><a href=\"https:\/\/rdactionconsultant.com\/en\/?p=1120\" target=\"_blank\" rel=\"noopener\">here<\/a><\/strong>, and\u00a0<strong><a href=\"https:\/\/rdactionconsultant.com\/en\/blog\/assessing-risk-of-sr-ed-audit\/\" target=\"_blank\" rel=\"noopener\">here<\/a><\/strong>, we reviewed the preparation of this audit meeting.\u00a0In this post we review what happens during and after the audit meeting.<\/p>\n<h2>The SR&amp;ED audit meeting<\/h2>\n<h3>Claiming means selling<\/h3>\n<p>A claim for SR &amp; ED tax credits may be accepted as submitted.\u00a0But when our claim is selected for an audit, we have to proceed to the second phase of the \u00absale\u00bb: we must close the sale. And that goes like a chess game: you have to plan several moves in advance and answer all the CRT&#8217;s questions.<\/p>\n<div class=\"citation-quote\">&#8220;Claiming is selling. It&#8217;s like a chess game: plan many shots in advance&#8221;<\/div>\n<h3>Atmosphere and attitude<\/h3>\n<p>The meeting with the CRA staff should be as relaxed as possible.\u00a0Of course there is a lot of money on the table, and no one is used to deal with tax representatives.\u00a0Still, it is essential to keep a maximum control over what happens in the room and this begins with the climate, the atmosphere that we generate since we do not control the initial mood of the auditors.<\/p>\n<p>Two groups are in the room :<\/p>\n<ul>\n<li>The CRA advisors are empowered over your claim.\u00a0They have already discussed it internally, identified their issues and their decision only depends on some key answers.<\/li>\n<li>Your representatives are convinced that they have super R &amp; D projects, that they &#8220;are worth it&#8221;, and that they need the money.<\/li>\n<\/ul>\n<p>The tone of the meeting must reflect a mutual respect.\u00a0The attitude must be positive, even though we perceive differences.\u00a0No arrogance.\u00a0We let the CRA advisors speak, because our priority is to answer to their questions and comments.\u00a0We are flexible and willing to negotiate.\u00a0We have managed our expectations since it is rare that an audit meeting ends with 100% acceptance of projects and costs.\u00a0It is usually hard to completely eliminate all of the initial issues identified by the CRA auditors.\u00a0But we can select our battles and sometimes leaving a chunk makes it possible to keep an other (bigger).<\/p>\n<h3>Who will be there?<\/h3>\n<p>As few people as required.\u00a0The rule of thumb is to be as many as the CRA officials, never more than double.\u00a0If we need more, then there must be a flow of resources in and out with a permanent representative in the room during the entire process.\u00a0We must ensure that each one is necessary, is prepared and knows what to say and how to respond.<\/p>\n<p>You used subcontractors to carry out part of the project?\u00a0Their role during the meeting should be limited to describe what they have achieved under your direction, when and how.\u00a0It is essential not to be technically overwhelmed by your subcontractor.\u00a0You claim the projects for which you are the supervisor.\u00a0If your contractors are the only ones who can explain the technology and what they have done, the CRA may suspect that you are not the one who should claim the efforts to meet these technological challenges.\u00a0So, do these subcontractors bring valuable content to this meeting?\u00a0Did they resolve some uncertainties?<\/p>\n<p>You have used a SR &amp; ED writer, or added a consultant to support you in your audit process?\u00a0His role during the meeting must be secondary.\u00a0The CRA wishes to discuss with your employees, and have as little interaction as possible with your consultants.\u00a0Still, competent consultants are welcome at the meeting as a safeguard in case of slippage. Not as master of ceremonies and even less so as the star of the meeting.<\/p>\n<h3>The agenda<\/h3>\n<p>The agenda is rather standard :<\/p>\n<ol>\n<li>Presentation of the people in the room,<\/li>\n<li>Introduction of the CRA consultant if they bring a consultant, presenting the letter mandating him,<\/li>\n<li>Site visit (if required)<\/li>\n<li>Review of the agenda and the expected duration,<\/li>\n<li>The CRA presents the SR &amp; ED program (optional)<\/li>\n<li>The CRA states it\u2019s objectives for this meeting and his issues (not always the case though but you must insist on a statement on those issues)<\/li>\n<li>You outline the company (mission, markets, products)<\/li>\n<li>You underline the importance of the SR &amp; ED program for the development and growth of the firm,<\/li>\n<li>You explain each project,<\/li>\n<li>Review of the costs claimed (if not already done for each project)<\/li>\n<li>Next steps and expected deadlines,<\/li>\n<\/ol>\n<h3>Your presentation.<\/h3>\n<p>Say it in your words. Your presentation must be technical, concise, visual, accurate and complete.\u00a0It illustrates only the experimental process used to resolve the technical uncertainties.\u00a0It must give priority to the issues and the questions raised by the CRA advisers.<\/p>\n<p>The presentation of each project is always the same:<\/p>\n<ul>\n<li>The technological (or scientific) objective of the project,<\/li>\n<li>The initial state of the art of the technology or science,<\/li>\n<li>The technical or scientific issues, and uncertainties encountered,<\/li>\n<li>The systematic investigation process followed, and the hypothesis raised while trying to resolve the uncertainties,<\/li>\n<li>The advancements achieved or not, what has been learned thru this process,<\/li>\n<li>The status at the end of the project or fiscal year end.<\/li>\n<\/ul>\n<h2>The meeting ends<\/h2>\n<h3>So what do we do ?<\/h3>\n<ul>\n<li>From now on their judgment is almost set and it will be difficult to make them change.<\/li>\n<li>You can ask their conclusion; they rarely communicate it during the meeting.\u00a0But it&#8217;s worth trying it.\u00a0Maybe they will conclude on some projects.<\/li>\n<li>You ask what issues have not been resolved and if additional information may be provided or within a short time (never provide unverified new information on the spot).<\/li>\n<li>Ask what are the delays for the next steps:\n<ul>\n<li>If we send the additional information within two weeks,<\/li>\n<li>So when will we have your position?<\/li>\n<li>When will we have a copy of the technical report?<\/li>\n<li>When will the assessment be provided?<\/li>\n<\/ul>\n<\/li>\n<li>If your feeling is positive, you think they accept your claim, then:\n<ul>\n<li>Talk about the next year, about the projects that are ongoing or about the new anticipated challenges.<\/li>\n<li>You want you make sure that they will not be surprised next year and that they do not feel the need to come back for years.<\/li>\n<\/ul>\n<\/li>\n<li>If, however, you feel that it did not work, then:\n<ul>\n<li>Ask them what is missing ?\u00a0Why aren\u2019t you convinced ?\u00a0What would change your opinion?<\/li>\n<li>Would a second meeting be required ?\u00a0To talk about what?<\/li>\n<li>Need new documents? more details?<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3>Thereafter<\/h3>\n<p>The additional information: Quickly prepare the detailed and accurate information requested.\u00a0Meet the deadlines, this may be your last chance to avoid a cut.<\/p>\n<p>Make sure you <strong>negotiate before being assessed<\/strong>.\u00a0After that it becomes very difficult to change their opinion. You will then have to prepare a notice of objection instead if it is worth it.<\/p>\n<h2>Conclusion<\/h2>\n<p>This concludes our series on preparing for a SR &amp; ED audit claim.\u00a0We hope you found us interesting and that we reduced the anxiety of the unknown.<\/p>\n<p>Feel free to call us for advice, or support.<\/p>\n<p>What do you think ?\u00a0Have you had audit meetings?\u00a0How were you prepared (or not)?\u00a0How did it go ?\u00a0What were the results?\u00a0What lessons have you learned?\u00a0Why ?<\/p>\n<p>We are honored by your visit to our blog. R&amp;D Action thank you for this.<\/p>\n<p>On the right of this page the index contains several other categories of practical and applicable solutions that are also intended for you.<\/p>\n<p>Did you like your reading? Tell us so. What should be added? What topics are you interested in?<\/p>\n<p>Did you dislike this reading? Tell us so. What did you like least about this text? How can we best meet your needs?<\/p><\/div>\n<p><!-- .vgblk-rw-wrapper --><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The audit by the CRA is certainly THE crucial moment in the claiming process for SR &amp; ED tax credits. We cannot avoid an audit, but we can certainly minimize it\u2019s negative impacts.\u00a0In earlier articles in this series here, here, here,\u00a0\u00a0here, here, and\u00a0here, we reviewed the preparation of this audit meeting.\u00a0In this post we review&#8230;<\/p>\n","protected":false},"author":8,"featured_media":3146,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[75],"tags":[],"class_list":["post-3143","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-audit"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>SR&amp;ED Audit meeting - R&amp;D Action<\/title>\n<meta name=\"description\" content=\"The SR&amp;ED Audit meeting is critically important. 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