Date: July 2, 2025

This guide cancels and replaces The SR&ED Technical Review: A Guide for Claimants. This version has been expanded to describe the process when reviewing both the work and the expenditures.

On this page

• Introduction
• What is the purpose of an SR&ED claim review and how long will it take
• Why has your claim been selected for review
• Can you withdraw your claim after it has been selected for review
• How does the CRA conduct a review
• The review
  • Step 1: The start of the review
    • 1.1 The CRA’s first contact with you
    • 1.2 Preparing for the review meeting
  • Step 2: The review meeting and requests for additional information
    • 2.1 Overview of the review meeting
    • 2.2 Interviews
    • 2.3 Tour of your premises
    • 2.4 Review of supporting information
    • 2.5 Concluding the meeting and sharing preliminary review findings
    • 2.6 Additional requests for information to support a claim
  • Step 3: The end of the review
    • 3.1 The CRA’s review findings
    • 3.2 Dispute resolution process
    • 3.3 Formal CRA objection process
• Preparing your next claim
• Appendix A: Your rights and responsibilities
  • What are your rights
  • What are your responsibilities
• Appendix B: Mutual expectations between you and the reviewers

Introduction

After you file your Scientific Research and Experimental Development (SR&ED) claim, it may be selected for review. If your claim is selected for review, this means the Canada Revenue Agency (CRA) needs additional information. A review can focus on both the work, to determine its eligibility, and on the expenditures, to determine if they are allowable. In some cases, a review will focus only on the expenditures. This guide provides an overview of the SR&ED claim review process when reviewing both the work and the expenditures.

This guide will walk you through what you can expect before, during, and after your SR&ED claim review. The guide also includes recommendations to help you prepare for each step of the review process.

What is the purpose of an SR&ED claim review and how long will it take

The purpose of a review is to determine whether your claim complies with the tax laws. Reviews are an important part of the SR&ED program’s range of activities that help to protect the integrity and fairness of the Canadian tax system and verify that SR&ED claimants receive the amount of investment tax credits to which they are entitled.

The service standard for processing refundable SR&ED claims selected for review is 180 calendar days from the date the CRA receives the complete claim. The CRA is committed to meeting this service standard 90% of the time. There is no service standard for processing non-refundable SR&ED claims selected for review.

Why has your claim been selected for review

All SR&ED claims undergo a risk assessment. Claims are selected for review based on this risk assessment, or for other reasons, such as random sampling.

If your claim is selected for review, it is because the CRA requires more information about the work and/or expenditures you have claimed before the CRA can process your claim. Having your claim selected for review means that the CRA may have identified one or more issues related to the eligibility of work or the related expenditures.

Issues may be general in nature and apply to the entire claim, or they may be specific and limited to particular projects in your claim.

Examples of possible issues requiring clarification are:

• The scientific or technological objectives of the project are unclear
• It is unclear what work was performed or by whom
• The work does not appear to be undertaken for the advancement of scientific knowledge or for the purpose of achieving technological advancement
• The work does not appear to be a systematic investigation or search by experiment or analysis
• It is not clear at what point (in time or in a process) the SR&ED started and/or ended
• There appears to be a mix of SR&ED work with non-SR&ED work
• Some of the support work claimed does not appear to be commensurate with the needs, or directly in support, of the SR&ED work
• The claim includes the cost of materials for SR&ED and it is unclear how or how much of the claimed materials were used in the SR&ED
• The work conducted under contract needs further clarification

The CRA takes the protection, privacy, and security of Canadians' information very seriously. The CRA has a number of internal processes in place to prevent unauthorized access to taxpayers' personal information and to make sure that taxpayers' rights are protected. Consult Security of Taxpayer Information for more information.

Can you withdraw your claim after it has been selected for review

If your claim is selected for review, you cannot withdraw it. Form T661, SR&ED Expenditures Claim, and related forms and schedules are part of your income tax return. When you filed Form T661, in Part 10, you certified that you had examined the information provided on the form and on the attachments and that it is true, correct, and complete. This certification cannot be revoked. Incomplete or inaccurate information may result in assessment of monetary penalties ^{Footnote 1} and delays in processing SR&ED claims.

How does the CRA conduct a review

A review is generally conducted by a research and technology advisor (RTA) who will determine whether the work meets the eligibility requirements, and a financial reviewer (FR) who will review the expenditures you claimed. The RTA reports to a research and technology manager (RTM), and the FR reports to a financial review manager (FRM).

For simplicity in this guide, RTAs and FRs are referred to as reviewers unless there is a need to distinguish between them.

The reviewers will communicate with you throughout the review process to:

• Explain the review process
• Establish the facts concerning your claim
• Explain the SR&ED program requirements
• Answer your questions about the review or SR&ED program requirements
• Explain decisions that confirm if the work is eligible or not and if the expenditures are allowable or not
• Provide you with recommendations to help you with future claims
• Explain dispute resolution procedures

The CRA conducts the majority of reviews using digital technologies (that is, virtual reviews). There are many aspects to conducting a review virtually that are beneficial to you, such as:

• It is often more efficient to use digital technologies to communicate, send and receive information, and conduct meetings through videoconferencing
• It is easier for more people to participate in a virtual review meeting. Your R&D staff, who may be in different locations, can join a virtual review meeting more easily
• Travel and accommodation are not required
• It is easier to find meeting times and dates that work for everyone as well as have ad-hoc meetings, when necessary
• It is easier to reschedule videoconference meetings, when necessary

If you believe that a virtual meeting prevents you from properly working collaboratively with the reviewers to resolve the issue(s), you may request an on-site visit on an exceptional basis. Requests for on-site visits are considered on a case-by-case basis and the decision to grant an on-site visit will be made by the review management team.

The CRA uses a national file assignment system for claim reviews. This means that your claim may be assigned to reviewers who are located outside of your province or territory and possibly in different time zones. All meetings or calls throughout the review will be scheduled to take into account your time zone and held within your business hours.

The review

A review can generally be broken down into three steps. Some activities in these steps may overlap or occur in a different order from what is presented in this guide. The activities will depend on the particulars of your claim and will also be influenced by your needs and your history with the SR&ED program. For example, if it is your first time filing an SR&ED claim, you can expect that the reviewers will spend more time explaining the SR&ED program and the review process. The CRA will decide the most appropriate review approach depending on the particulars of your claim.

Throughout all steps of the review, the reviewers will communicate with you in a transparent manner. This means they will be open and frank when discussing the issue(s) under review. For example, when requesting information, the reviewers will explain to you why the information is needed. Likewise, if you have any questions or require clarification on what is being asked for, you can ask the reviewers. This transparency will help you understand where clarification is needed.

Having clear expectations and good transparent communication throughout the review will allow for a more effective and efficient review.

To understand your rights and responsibilities throughout the review process, please refer to Appendix A. To understand the mutual expectations between you and the reviewers, please refer to Appendix B.

Step 1: The start of the review

The first step covers what happens before the review meeting.

1.1 The CRA’s first contact with you

When your claim has been selected for review, one of the reviewers assigned to your claim will contact you by phone. Topics covered in this initial call usually include the list below, but could be modified depending on the unique situation of your claim:

• Your claim has been selected for review and the review will be conducted by an RTA and an FR; their names and contact information will be provided
• Confirmation of your official language of choice
• The issue(s) identified in your claim and the projects that will be reviewed. The reviewers will try to be as specific as possible when identifying issues, however, the ability to do so can depend on the content of the information submitted in the claim
• A review meeting will take place (virtually or exceptionally, on-site), at a mutually agreed upon date and time
• You will need to present your work and provide information that supports it
• What information you have available to support your claim (in some cases, the reviewers may request that you send information before the review meeting)
• Whether you have a My Business Account or My Account set up, confirmation of your mailing or physical address as well as determining your preferred method of secure communication
• Who from your company will participate in the review meeting to explain the work and expenditures. Email addresses will be requested so the reviewer can send out the invitation for the virtual meeting
• You will receive an initial letter that will summarize what was discussed during the call, as well as:
  • A list of any information being requested to address the issues, and whether the information is needed before or at the meeting. If any information is required before the meeting, a deadline will be provided following the Standard Timelines for Information Requests, which is generally 30 days
  • A meeting agenda identifying the issues and related projects to be discussed as well as an estimated amount of time for each area of discussion. The agenda may be sent at a later date if its contents have not been finalized at the time the letter is sent. Some of the topics covered during the review meeting are listed in Section 2.1
  • Contact information for the reviewers and their managers

1.2 Preparing for the review meeting

Preparing for the meeting is important as it will facilitate the review of your claim. Below are some recommendations to help you prepare.

Feel free to contact either of the reviewers during your preparation if you have any questions about the review process.

Step 2: The review meeting and requests for additional information

The second step is the review meeting. Below is an overview of the review meeting as well as information on the key review meeting activities.

2.1 Overview of the review meeting

The review meeting is held to obtain the clarification needed to resolve the issues previously identified by the reviewers, as well as address any other questions or concerns that may arise during the meeting. As such, the scope of the review may be expanded (to include other issues) or reduced (if the resolution of one issue leads to the resolution of other issues).

Depending on the nature of your claim, the issues identified, and your experience with the SR&ED program, the reviewers will undertake some or all of the following activities:

• Explain the SR&ED program, the review process, and your rights and responsibilities
• Request additional information about your business context (such as number of employees, expertise, products, or services)
• Ask you to explain how the claim was put together (such as how you distinguished between SR&ED and non-SR&ED work, what information you used to help you prepare the claim, and how claimed work and expenditures were identified)
• Conduct discussions on the issues identified in your claim and seek clarification to resolve them
• Interview the individuals who performed and/or supervised the work [see section 2.2 below]
• Tour your premises (virtually or on-site) to see where your SR&ED work was performed, and see if it helps bring the clarification needed to resolve the review issues [see section 2.3 below]
• Review information generated during the course of your work (such as documents, physical samples, scraps, videos and software revision or commit logs) [see section 2.4 below]
• Ask you to provide additional information as needed [see section 2.6 below]
• Give you the opportunity to present your position, ask questions, express any concerns, and provide more information with respect to your claim
• Communicate and discuss the preliminary review findings
• Communicate and discuss the next steps in the review process
• Explain the available options for resolving any concerns you may have during the review
• Explain the dispute resolution process if you do not agree with the outcome of the review

2.2 Interviews

The reviewers will interview the people who were directly involved in the work (those who performed or supervised the work). These individuals can discuss the work based on their actual experience and can help provide the information necessary to resolve the review issues.

The interview process is a dynamic discussion between the people who performed or supervised the claimed work and the reviewers. The box below contains some recommendations to help you prepare for this discussion.

During the interview, the reviewers will take notes that will form part of their working papers. The reviewers will consider the statements you make in interviews along with other supporting information that you provide. However, oral statements are not a substitute for keeping adequate documentation or other evidence.

2.3 Tour of your premises

To better understand your claim and business, reviewers may need a tour of your place of business or manufacturing premises. In most cases, the tour can occur virtually without the need for the reviewers to be on-site. A tour provides an opportunity for the reviewers to visualize and contextualize the claimed work within your business environment.

If the tour is being conducted virtually, you can present your work in a virtual manner by:

• Recording or photographing a product or process and sending it to the reviewers
• Presenting slides or other documents through screen sharing during a videoconference
• Demonstrating a product live during a videoconference or showing examples at different stages of the development, and
• Using a camera-equipped laptop or mobile device to take the meeting participants on a tour of the facility or show a live production run

If an on-site tour is necessary, this will be arranged and discussed with you.

2.4 Review of supporting information

As mentioned in the recommendations above, the reviewers will ask to see the information that you indicated having on lines 270 to 282 of Form T661 to support your claim. This information should convey what work was done, who was involved with the work, when they did the work, and how you determined the expenditures associated with the work. This information will help reviewers determine whether eligible work was performed, and allowable expenditures were incurred.

Supporting your SR&ED work

The information available to support your SR&ED work is called supporting evidence. Documents that were generated when the work was being carried out are the most common, but supporting evidence can also include things like photographs, videos, scrap, or other artifacts that relate to the work.

The best supporting evidence is documentation that is dated and specific to the work performed. The evidence you keep must support the information you provided in Part 2 of Form T661. The reviewers may ask for all or some of this documentation during the review. It may also be helpful to refer to Appendix 2 of Guide to Form T661 to help you identify the supporting information you have that best addresses the reviewers’ questions.

Supporting your SR&ED expenditures

You must also keep complete and organized records that support the expenditures you claim. The CRA’s webpage provides information on what are records, who has to keep them and why it is important as well as your responsibilities and the requirements associated with records the law requires you to keep.

Records and documents that the reviewers might ask for during a review include: financial statements, ledgers, journals, and vouchers, and electronic records. The reviewers may also ask for source documents such as receipts, contracts, and general correspondence. Also, keep all related documents and information that support the specific expenditures in your SR&ED claim.

2.5 Concluding the meeting and sharing preliminary review findings

At the end of the meeting, the reviewers will verbally provide a summary of:

• Their understanding of the work
• The clarification that they obtained regarding the issues
• The areas where they still have concerns and require further clarification (if applicable)
• The information that is still missing and needs to be obtained (if applicable), along with a deadline for providing that information
• The preliminary review findings*
• Recommendations for future claims
• The next steps in the review process

*Sometimes, it is not possible for the reviewers to communicate their preliminary review findings at the end of the meeting. This can be due to needing more time to review new information and their interview notes. They may also be waiting for additional information from you. In this case, the reviewers will discuss any outstanding concerns with you and outline the next steps in the review process and the time frame within which a decision can be expected.

2.6 Additional requests for information to support a claim

Additional requests for information may be made during or after the review meeting. If information is requested during the meeting and you are unable to provide it at that time, you will be asked to provide it by a specific deadline. Additional information may also be requested after the review meeting. If this is required, you will receive a call from one of the reviewers explaining what clarification is needed and to discuss what information you can provide to resolve the issues. This will be followed up in writing with a letter outlining what is being requested and the deadline for providing the information. If the requested information is not provided by the deadline, the review will continue based on the information already received.

In some cases, if you cannot or will not provide the requested information, the reviewers may request information from another person or business that relates to your work, such as a client, a contractor, or another third-party. (Authority to request information from a third party is under subsection 231.1(1) of the Income Tax Act (ITA). For more information, see section 10.6.0 of the Income Tax Audit Manual.)

Step 3: The end of the review

The third step covers what happens after the review meeting.

3.1 The CRA’s review findings

The reviewers will communicate their final review findings to you by phone or videoconference, before sending them to you in writing.

The SR&ED Project Eligibility Report, prepared by the RTA, explains whether the work in your project(s) is eligible. The SR&ED Project Eligibility Report may also include recommendations for future SR&ED claims such as improvements to project and supporting information, or suggestions for improving your self-assessment process.

The FR uses the SR&ED Project Eligibility Report, and provisions of the ITA, to make adjustments to your allowable and qualified SR&ED expenditures. If adjustments are being proposed to your claim, you will receive a proposal package which will include:

• An SR&ED Project Eligibility Report
• A proposal letter summarizing any proposed adjustments of the claimed expenditures and investment tax credit, and if applicable, a proposal of a penalty ^{Footnote 2}
• Additional details of the proposed adjustments and the associated financial and tax implications, if applicable

If no adjustments are being proposed to your claim, you will receive an SR&ED Project Eligibility Report and a final letter followed by a notice of assessment or reassessment.

Responding to the review findings

If the CRA proposes changes to your claimed SR&ED expenditures and investment tax credit amounts, you will be asked to indicate whether you agree with the review findings. If you want to discuss the review findings or get additional clarification before responding to the proposal, you can contact the reviewers.

If you agree with the review findings, or if you do not send a written response to the proposal package by the indicated deadline, the review will conclude. You will receive a final letter followed by a notice of assessment or reassessment.

If you disagree with the review findings, you have the right to explain your position in writing and provide additional information or clarifications. This is called making written representations. The reviewers will analyze your written representations and will provide a written explanation on whether the review findings will be changed as a result of the new information provided. The CRA’s Standard Timelines for Information Requests outlines the timeframe you will have to provide your response, which is generally 30 days from the date of the proposal letter.

If the new information changes the reviewers’ decisions, the reviewers will send you a written summary of the changes and the rationale. You will then be sent a notice of assessment or reassessment based on the modified review findings.

If the new information does not change the reviewers’ decisions, this will be communicated to you in writing with a rationale why it does not change the review findings. You will then be sent a notice of assessment or reassessment based on the original review findings.

In the event that a monetary penalty was proposed and you submitted representations, the final letter will advise you whether the CRA decided to apply the penalty. If the penalty is applied, the final letter will inform you of the final amount of the penalty.

3.2 Dispute resolution process

The CRA is committed to providing fair treatment to all SR&ED claimants. In keeping with this commitment, the CRA has established Guidelines for resolving claimants’ SR&ED concerns to ensure that your concerns are addressed in a fair and timely manner. These guidelines describe a three-step process where you are encouraged to:

• Talk with the reviewer(s) to try to resolve any disputes
• Talk with the reviewer’s manager(s)
• Ask for an administrative review following receipt of the proposal package if your concerns have still not been adequately addressed by the reviewer(s) and manager(s)

An administrative review is not a second review of your claim by different reviewers; the administrative review aims to make sure that the review was conducted according to SR&ED legislation, policies , and procedures and to confirm that you were given due process during the review.

3.3 Formal CRA objection process

After the CRA's decision on your SR&ED claim has been made, you still have options if you disagree. You have the right to object to the CRA’s decision. If you choose to do so, you must file a formal objection within 90 days from the date of your notice of assessment or reassessment. For more information on how to file a formal objection, refer to Resolving disputes.

Preparing your next claim

As you prepare your next SR&ED claim, be sure to follow any recommendations made by the reviewers as part of your prior claim review and refer to the T4088 Scientific Research and Experimental Development (SR&ED) Expenditures Claim - Guide to Form T661. You may also wish to take advantage of the various support services and tools. If you have questions, contact your local tax services office.

Appendix A: Your rights and responsibilities

What are your rights

Taxpayer Bill of Rights

The Taxpayer Bill of Rights is a set of 16 rights that you have as a taxpayer. They build upon the CRA’s corporate values of professionalism, respect, integrity, and collaboration and describe the treatment you are entitled to when you deal with the CRA. To learn more about your rights and what you can expect when you deal with the CRA, see the Taxpayer Bill of Rights.

Below are additional details on some of the rights you have when dealing with the CRA during a review.

Service in both official languages: Right 2

The CRA’s communications with you will follow the terms of the Official Languages Act. You have the right to receive services in the official language of your choice. When you file a claim in one of the official languages, it is often an indication that you wish to be served in that language. However, should you wish to receive communication in the other official language, you have this right.

Privacy and confidentiality of your information: Right 3

You can expect the CRA to protect and manage the confidentiality of your personal and financial information according to the laws the CRA administers, such as the ITA, the Excise Tax Act, the Excise Act (2001), and the Privacy Act. The ITA contains a provision in section 241 for protecting the confidentiality of your records and outlines the restrictions regarding the communication of your information.

Formal review or appeal: Right 4

You are entitled to a formal review of your file if you believe you have not received your full entitlements under the law and your dispute could not be resolved with the reviewer(s) or their manager(s). For more information about what to do in specific situations, or to find out how to send an objection or an appeal, see Objections, appeals, disputes, and relief measures.

Service complaint: Right 9

Generally, “service” refers to the quality and timeliness of the work the CRA performed. A service complaint could involve having received unclear or misleading information, staff behavior matters, mistakes, or undue delays.

If you are dissatisfied with the service you received, try to resolve the matter with the reviewer(s) or ask to discuss it with their manager(s). If you are still dissatisfied, you can submit a service complaint. For more information, see Send feedback about CRA service.

Right to be represented: Right 15

You have the right to choose a person to represent you. Once you authorize the CRA to deal with this person, the CRA can discuss your claim with your representative. Your authorized representative can participate in meetings if requested by you and make representations on your behalf.

To protect your privacy, a signing officer of the company must notify the CRA that someone is an authorized representative. This can be done by following the steps on Authorize a representative.

Due process

Due process is a fundamental requirement in the review of an SR&ED claim and means that:

• The review is fair and impartial
• You are treated with courtesy and respect
• The legislation and the policies are applied correctly

The principle of due process aligns with the Taxpayer Bill of Rights noted above.

Below are the eight principles of due process that the CRA must follow and the related taxpayer rights:

• Provide service in your official language of choice (Right 2)
• Explain to you the review process, issues, and the planned approach to resolve them (Rights 5, 6, and 10)
• Communicate the options available to you if you disagree with the review decision (Rights 4 and 9)
• Provide you information on the CRA’s requirements and explain what information is needed to satisfy those requirements (Right 6)
• Give you the opportunity to present your position, ask questions, express your concerns, and provide more information regarding your claim (Rights 1, 5, and 15)
• Consider additional information given in support of your position before coming to a decision (Rights 1, 5, and 15)
• Explain decisions and rationales to you (Rights 5, 6, 9, and 11)
• Make decisions that are fair and impartial, and that respect current legislation and policy (Rights 1 and 8)

What are your responsibilities

During a review, you will be asked to provide information to support your claim and to respond to questions. Providing complete and timely responses will help ensure that the review is as efficient as possible. Section 239 of the ITA outlines the legal consequences of not providing information and of providing information that is not correct.

By law, you are required to keep adequate books and records so that the CRA can determine your tax obligations and your entitlements (subsection 230(1) of the ITA). The CRA’s webpage provides information on What are records, who has to keep them and why it is important as well as Your responsibilities and the requirements associated with records the law requires you to keep. Generally, books and records must be kept for a minimum of six years. If you use a computer for your accounting records, you must keep your books and records in an electronically readable format, even if you also keep them in paper format. The CRA has the authority to make or get copies of documents under subsection 231.5(1) of the ITA. Subsection 230(3) of the ITA allows the CRA to specify what books and records must be kept.

Appendix B: Mutual expectations between you and the reviewers

Throughout the review, you will be expected to:

• Cooperate with the reviewers
• Prepare for the review meeting by having the requested supporting information available
• Ensure that the people who are best able to explain the work done and expenditures claimed are available to be interviewed
• Prepare for the possibility of an expanded review if new issues are identified
• Provide your supporting information respecting the Standard Timelines for Information Requests
• Answer questions asked by the reviewers
• Ensure that documentation created while the work was being conducted is available and organized for review, and that someone is available to explain the significance and relevance of the documentation
• Explain how the claim was put together and what supporting information was used in its preparation
• Focus on the issues identified by the reviewers and the facts related to the work done to address these issues
• Respond to any concerns raised by the reviewers regarding the quality of project information, claim organization, or adequacy of the supporting information
• Indicate any concerns as early as possible to the reviewers
• Provide additional information or clarifications in writing if you disagree with the proposal package or SR&ED Project Eligibility Report

Throughout the review, the reviewers will:

• Explain the SR&ED program, as well as its requirements and policies
• Discuss the issues that they plan to address and their approach for addressing them
• Work together to avoid duplication of information requests
• Discuss what they will need during the meeting, whether it is to see supporting information or to speak to certain people who were involved in the SR&ED work
• Identify, as early as possible, any new issues that arise during the review
• Indicate any concerns that remain at the end of the review meeting
• Explain all decisions and provide reasons in writing. This will help improve your understanding of program requirements and help you be better positioned to provide any further information that may not have been considered
• Give you the opportunity to ask questions and provide more information or explanations in response to their decisions
• Respond to you regarding additional information you provide in response to the SR&ED Project Eligibility Report and proposal package
• Provide feedback and guidance to you, as required, to explain any deficiencies in documentation or project information

Footnotes

Footnote 1

A penalty may be applied to a claimant who knowingly under circumstances amounting to gross negligence has made, or has assented to the making of, a false statement or omission in their income tax return, a statement, or a written answer. For the purposes of subsection 163(2) of the Income Tax Act, a false statement is a statement that is wrong or incorrect. The presence of a false statement or omission is not enough in and of itself to apply a gross negligence penalty. The CRA must also establish that the false statement or omission was made knowingly or under circumstances amounting to gross negligence.

Return to footnote 1 referrer

Footnote 2

When the CRA establishes that a false statement or omission was made knowingly or under circumstances amounting to gross negligence, the proposal letter will advise you that a penalty is being proposed on one or more adjustments. The proposal will include a brief explanation on each adjustment considered for the proposal of the penalty, the amount of the adjustment, and the amount of the penalty. Gross Negligence Penalty on Overstated SR&ED Claims Policy provides additional information on the calculation of the gross negligence penalty.

Return to first footnote 2 referrer