SR&ED Audit Defense: How to Prepare for CRA Review
CRA reviews select SR&ED claims for audit. Learn what triggers a review, how to prepare, and how to build defensible claims from the start.
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What triggers a CRA SR&ED audit
CRA selects claims for review based on several factors. Understanding what triggers a review helps you prepare proactively and build claims that are less likely to be selected.
- Large or unusual claims relative to company size or industry
- First-time claimants with significant claims
- Significant increases from previous years without clear explanation
- Weak or inconsistent narratives in the T661
- Random selection as part of CRA's ongoing review program
How to prepare for a CRA review
The strongest defense against a CRA review is strong documentation. Contemporaneous records showing systematic investigation are the foundation of a defensible claim.
- Maintain an evidence index that maps documentation to each claim element
- Keep contemporaneous records: lab notes, design docs, git commits, test results
- Document time allocation with reasonable support from project records
- Ensure technical narratives are specific and tied to actual work performed
- Have your CPA review the claim before filing to catch inconsistencies
A CRA review typically takes 3 to 12 months. Well-documented claims with clear narratives are generally reviewed faster. Claims requiring extensive back-and-forth or site visits take longer.
Ready to turn this into a claim?
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