Updated CRM For RTAs Series Part Two: First Time Claimant (FTC) Reviews vs FTCAS

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One addition to the April 2015 revision of the Claim Review Manual (CRM) for Research and Technology Advisors (RTAs) is additional information regarding the treatment of first time claimants (FTCs). This service is similar — but not identical to — the First Time Claimant’s Advisory Service (FTCAS) offered under the Scientific Research and Experimental Development (SR&ED) program. Our second instalment of the “Updated CRM for RTAs” series will:

• provide a background on the First Time Claimant Advisory Service (FTCAS)
• comparison of the FTCAS to a FTC review, and
• highlight the RTA’s educational responsibilities to the claimant

Please see Updated CRM for RTAs Series Part One: Clarified Definitions for an overview of revisions to key definitions with the SR&ED glossary.

Background: First Time Claimant Advisory Service (FTCAS)

The FTCAS is a face-to-face consultation which is offered to first-time claimants (FTCs), and which forms part of the recent structural revisions outlined within the Claim Review Manual for RTAs.

The First-Time Claimant Advisory Service (FTCAS) is a free in-person service that provides first-time Scientific Research and Experimental Development (SR&ED) claimants with an opportunity to meet with local Canada Revenue Agency (CRA) SR&ED staff, at their place of business, to gain a better understanding of the SR&ED program. During these visits the SR&ED reviewers will provide businesses with advice on:

• how to identify potential eligible work in the context of their business;

• how to identify allowable expenditures;

• the types of documentation and other evidence that could support a claim; and

• how to complete and file their future SR&ED claims¹

FTACS vs. a First Time Claimant review

As indicated in the updated CRM:².

not every first-time claimant will be given an FTCAS; some will be accepted as filed (AFF) and some will be reviewed. For those first-time claimants that have been selected for a review, the RTA and FR must give an information session similar to that described in the FTCAS Guide. This section pertains to that situation, i.e. A first-time claimant selected for a review (not an FTCAS).

As such, the CRM specifies the difference between a (a) being accepted as filed (AAF) – no contact with the CRA (b) being selected for a FTCAS (not a review), and (c) a FTC selected for review.

First Time Claimants Selected For a Review

The CRA provides the following guidance for a RTAs who are meeting with a first time claimant selected for a review: (see the CRM’s revised Chapter 5.6.1.1.):

The RTA will provide an information session tailored to the type of work claimed and answer any questions the claimant may have about the SR&ED Program [emphasis added]. In particular, the RTA will explain the SR&ED Program requirements, familiarize the claimant with the SR&ED website and demonstrate the tools such as the Self-Assessment and Learning Tool (SALT) and policy documents relevant to the work claimed, to help the claimant get an understanding of:

• how to identify potential eligible work;

• the documentation and other evidence to support the claim; and

• how to complete and file future SR&ED claims.

[…] Like the rest of the review, the claimant can decide to have a representative present during the information session. However, the claimant should be present.

The RTA should also set aside additional time in the on-site visit to give greater consideration in these areas, as required:

• Explain the mutual expectations between the claimant and the RTA (Appendix A.8).
• Explain the claimant’s rights and responsibilities.
• Explain the review process.
• Explain the avenues available for resolving claimant’s concerns and the appeals process.

Remember that the information session should be tailored to the claimant’s specific needs and what they know [emphasis added]. Where it is clear that a claimant understands some aspect of the SR&ED Program and its requirements, the session does not need to discuss that item in detail. Therefore, while each of the subjects should be discussed, the time spent can be short if a detailed discussion is not required³

First Time Claimant Considerations: The Verdict

Section 5.9.0 of the Claim Review Manual for Research and Technology Advisors does an excellent job of summarizing the intent and scope of the additional educational requirements needed when working with  first-time claimants (emphasis added):

It is important to note that SR&ED legislation and policies apply to all claimants equally. Being a first-time claimant does not reduce or eliminate the onus on the claimant to substantiate their claim and provide supporting evidence of the work performed.

However, as noted above, with first-time claimants, the RTA spends more time with them so that they can understand documentation and supporting evidence requirements and how they can be met ⁴.

Claimants are expected to and should take it upon themselves seek out additional information about the SR&ED claim process. In order to better understand the breadth and range of questions regarding the SR&ED program, SR&ED claims, and additional questions which can be addressed by RTAs, first-time claimants should also attend some of the CRA’s local public information sessions and familiarize themselves with the literature available on the CRA’s website.

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.

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