Yesterday CRA announced that its’ new Claim Review Manual for RTAs will be in use on May 1, 2010. This manual will only be available to the public in abridged form. It is understandable why CRA does not want to publish the entire manual. However, the secrecy may lead to some difficulties in determining how to make case for an Administrative Second Review (ASR). CRA Application Policy Paper SR&ED 2000-02R dated June 30, 2005 entitled: Guidelines for resolving claimants’ SR&ED concerns describes the process claimants should follow in resolving their issues with CRA. One option available to a claimant involves requesting an ASR to determine whether the SR&ED laws and policies have been correctly applied and if the claimant has been given due process. In order to initiate an Administrative Second Review, the claimant must make their request in writing to the SR&ED Assistant Director. In their request, the claimant should explain why they want an Administrative Second Review and should provide relevant facts and documentation to support their case. It will be somewhat difficult to determine if CRA review policies have been properly applied given that some of them will not be available to the public.
Requesting an ASR has always been a conundrum for taxpayers and their representatives in that it requires that they must openly criticize the work of the RTA who reviewed their claim and likely will review it the next time around. Most taxpayers would like to keep a good relationship with their RTA but the policy requires that they criticize the RTA to the SR&ED Assistant Director in writing. It is assumed by most that the stronger the criticism the more likely the request will be allowed.
A process requiring an independent review should be available to claimants. Claimants should not have to criticize the work of the RTA. The issue here is an issue of whether the work undertaken by the claimant is SR&ED, not whether CRA’s policies and procedures were followed. Somewhere along the line we lost substance and replaced it with form in the review process.