CRA SR&ED Audit — Montreal CPA Firm Near You: Defending Your Scientific Research and Experimental Development Claims

A CRA SR&ED (Scientific Research and Experimental Development) Audit examines the eligibility of your R&D activities for tax credits, deductions, and investment incentives. SR&ED claims are among the most frequently audited by CRA due to their complexity and high-dollar value. Mackisen CPA Montreal specializes in defending these audits by providing comprehensive technical, legal, and financial documentation to prove that your activities meet the strict criteria outlined by CRA.

SR&ED audits focus on the scientific and technological aspects of your work, requiring a clear demonstration of how your research contributes to technological advancement. Without the proper documentation, even legitimate claims can be denied.

Legal Foundation

Income Tax Act s.37 — defines scientific research and experimental development for tax-credit purposes.
Scientific Research and Experimental Development Tax Incentive Program — CRA’s guidelines for eligibility and documentation requirements.
Jurisprudence: Concreate Ltd. (2014 TCC) — confirms that R&D must involve technological advancement and experimental development, with a systematic approach to solving technical uncertainties.

Learning insight: SR&ED is not just about costs; it’s about demonstrating technological progress. Your CPA ensures that progress is documented and verifiable.

Why CRA Audits SR&ED Claims

CRA audits SR&ED claims to verify that the activities claimed actually meet the legal requirements of R&D. The most common reasons for a CRA SR&ED Audit include:
• lack of detailed project descriptions and technical documentation
• failure to establish a direct link between R&D activities and technological advancement
• insufficient records proving that experimental development was conducted
• improperly classified expenses, such as non-research-related salaries or capital expenditures
• projects with unclear or unsupported hypotheses and experimental methods
• claims for non-eligible activities, such as routine data collection or market research

Learning insight: CRA doesn’t assume R&D work is eligible — it expects clear evidence of technological uncertainty and systematic investigation.

CRA’s SR&ED Audit Process

1. CRA issues an audit notice requesting project documentation, including technical reports, funding agreements, and detailed expense breakdowns.

2. CRA requests interviews with technical staff or researchers to understand the process and methodology of the claimed R&D activities.

3. CRA reviews project records to ensure they comply with the CRA’s SR&ED criteria: technological advancement, systematic investigation, and addressing scientific uncertainty.

4. CRA tests eligibility against the specific criteria for SR&ED, including experimental development and technological innovation.

5. CRA proposes adjustments if the claim does not meet eligibility requirements.

6. Mackisen CPA prepares a full defense by presenting detailed technical reports, proving the nature of the experimental development, and ensuring the activities are properly documented.

Learning insight: The audit process is deeply technical and specialized — having a CPA with SR&ED expertise is essential to demonstrate eligibility.

Mackisen CPA’s SR&ED Audit Defense Strategy

• provide systematic reports linking research activities to technological uncertainty and experimental development
• prepare detailed technical descriptions for each R&D project, clearly outlining the hypothesis, experiment, and outcome
• justify eligible expenses such as wages, materials, overhead, and contractors using industry standards
• review CRA SR&ED eligibility criteria to ensure activities are properly classified
• compile project documentation such as prototypes, test results, and scientific reports
• interview R&D staff to ensure their work aligns with claim descriptions
• submit CPA-certified audit files for CRA review, structured according to the specific requirements of the audit team
• handle CRA appeals if claims are denied or adjusted

Learning insight: CRA audits require more than just records — they require documentation of progress. We document that progress professionally.

Common CRA SR&ED Audit Findings

• claims for activities not related to technological advancement or experimental development
• inadequate project descriptions or lack of detailed technical evidence
• non-eligible costs (e.g., routine data collection, market research, or non-technical personnel)
• failure to demonstrate systematic investigation or hypothesis-driven testing
• incomplete or poorly organized financial documentation for R&D expenditures
• insufficient proof of scientific uncertainty that needed to be addressed through experimentation

Learning insight: Most CRA rejections result from poor documentation, not from the quality of research itself. Documentation makes the difference.

Real-World Results

• A Montreal-based software company avoided a $400,000 SR&ED reassessment after Mackisen CPA helped document the systematic investigation and technological progress behind their R&D work.
• A construction firm reversed a CRA denial of $350,000 in SR&ED credits after we proved their use of new materials involved experimental development for an innovative building method.
• A biomedical research lab secured $1.2 million in SR&ED credits after Mackisen CPA built a comprehensive technical file showing how their research addressed scientific uncertainty in medical treatments.

Learning insight: The difference between an SR&ED audit and a successful claim often comes down to the clarity and precision of your CPA’s documentation.

SEO Optimization and Educational Value

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Learning insight: In both SEO and CRA audits, clarity, precision, and thorough documentation increase credibility. We make sure your credibility is maximized.

Why Mackisen CPA Montreal

With more than 35 years of CRA SR&ED audit-defense experience, Mackisen CPA Montreal is recognized as a leader in defending R&D tax credits. Our bilingual team combines scientific, technical, and accounting expertise to document your research, justify your expenses, and ensure compliance with CRA’s strict SR&ED requirements.

Learning insight: SR&ED is more than a financial claim — it’s a scientific claim. Mackisen CPA proves the science behind your research.

Call to Action

If your SR&ED claim is under audit or CRA has requested additional documentation, don’t wait. Prepare a structured, detailed defense with Mackisen CPA Montreal.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA SR&ED Audit tests both the legitimacy and documentation of your tax claim. Mackisen CPA Montreal ensures your claim is backed by clear, accurate, and scientifically valid evidence that CRA can accept with confidence.