SR&ED Dispute Resolution and Second Opinion Advocacy Initiative: Implementing the Minister's mandate
January 12, 2016

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++ Action Item: Please review the briefing note below which includes hot links to major supporting materials and then confirm your interest and support for advancing Dispute Resolution advocacy to John Reid at today. The SR&ED Dispute Resolution and Second Opinion Advocacy Initiative is part of CATA’s Competitive Innovation Nation Campaign to advance Canada to number one ranking for innovation and competitiveness. The Alliance is calling on the Minister of National Revenue, the Hon. Diane Lebouthiller, to adopt new and or much approved Dispute Resolution approaches, as part of implementing her Ministerial Mandate.

Briefing Note: Dispute Resolution and the Second Opinion - Did the Minister's consultant, Paul Danielle Mueller have it right In 2009?

Re: CRA's Dispute Resolution Processes, the new Government's predecessors were advised by their own consultant that "- Claimants can legitimately expect to have access to a Second Technical Review (STR) at their own and sole discretion. Non-access to such a STR appears inconsistent with CRA's commitment to a complete formal review of disputes, under the Taxpayer Bill of Rights. At the same time, access to a STR needs to be defined so as to mitigate the risk of abuse and uncontrolled cost."

" - MNR [Minister of National Revenue] might announce that he has asked CRA to redesign its dispute resolution process with regards to SR&ED claims so that:

  • Claimants have access to a Second Technical review (STR) at their sole discretion;
  • The STR will be performed by a qualified reviewer that is independent, in fact and in appearance, from the original RTA and his/her managers;
  • A mechanism will mitigate the risk that claimants abuse access [sic] the STR, thereby bogging down the system.

If the STR is located at the Appeals stage, then CRA could establish service standards for Appeals, especially for refundable claims."

Mr. Muller and the courts recognize that there is a bias in the CRA that must be addressed for disputes to be fairly and effectively addressed. How do we get CRA to see the light.

You can read Mr. Mueller's full report at: cata.ca

In addition, the Courts in their decision re: SR&ED claims have highlighted their concerns that CRA's reviewers cannot be relied upon to give unbiased opinions on eligibility because of their employer relationship.

The current notice of objection process and seeking redress through the courts are too slow and costly to provide a useful dispute resolution remedy. Over the last decade, CRA has proven insensitive to solving these problems with the redress processes available to claimants. The issue has been repeatedly highlighted to CRA management.

CATA believes that the CRA’s de facto re-orientation of Canada's largest program of support for innovation needs to be corrected immediately so that the full spectrum of technological based advancements is supported and that SR&ED can be effectively claimed when it is conducted in conjunction with the highly integrated commercially-oriented development efforts that Canadian companies need to apply in order to be competitive and efficient, and respond to world markets.

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