Canada: Reviews and audits | Research Credit Integrity Alliance

This page describes how the CRA selects and reviews SR&ED claims, based on the CRA's published guide to the review process and the Income Tax Act. It covers selection, who carries out a review, the steps of a review, how findings are communicated, and the time limits that apply.

Summary

Feature	What the official sources say
Risk assessment	All SR&ED claims undergo a risk assessment.1
Selection	Based on the risk assessment, or other reasons such as random sampling.1
Reviewers	Generally a research and technology advisor (RTA) for the work and a financial reviewer (FR) for the expenditures.1
Format	Most reviews are conducted virtually; an on-site visit may be requested on an exceptional basis.1
Claims accepted as filed	Processed within 60 calendar days of receiving a complete claim.2
Refundable claims reviewed	Completed within 180 calendar days of receiving a complete claim, a standard the CRA aims to meet 90 percent of the time.12
Non-refundable claims reviewed	No service standard.1
Withdrawal	A claim selected for review cannot be withdrawn.1

Risk assessment and selection

The CRA's guide states that all SR&ED claims undergo a risk assessment, and that claims are selected for review based on that assessment or for other reasons, such as random sampling.1 A claim may be selected because the CRA needs more information about the work or the expenditures, and the review may cover the whole claim or specific projects.1 The CRA's page on what happens after a claim adds that claims may also be selected where they include projects that were not pre-approved, or projects that differ materially from those that were.3

Budget 2025 stated that the CRA would increase its use of artificial intelligence in administering the program so that low-risk claims are processed faster, with the administrative changes in place from April 1, 2026.4 The CRA has not published the criteria used in its risk assessment in the sources reviewed for this page.

The CRA's legal powers

The review process sits on general powers in the Income Tax Act. An authorized person may, for any purpose related to the administration or enforcement of the Act, inspect, audit or examine documents, examine property or processes, enter business premises (a dwelling-house only with consent or a warrant), and require a taxpayer or any other person to answer proper questions orally or in writing and to give all reasonable assistance.5 Every person carrying on business must keep records and books of account that allow the tax payable to be determined.6

Who carries out a review

The CRA states that a review is generally conducted by a research and technology advisor, who assesses whether the work is eligible, and a financial reviewer, who reviews the expenditures claimed.1 The reviewers communicate with the claimant throughout, and the guide states that in most cases any tour of the work can take place virtually; an on-site visit may be requested on an exceptional basis.1

The three steps of a review

The CRA's guide divides a review into three steps.1

Step	What happens
1. The start of the review	One of the reviewers contacts the claimant by phone, followed by a letter. Deadlines for requested information are generally 30 days under the CRA's standard timelines for information requests.
2. The review meeting	The meeting is held to obtain the clarification needed to resolve the issues. The reviewers interview the people directly involved in the work and may ask for more information.
3. The end of the review	The reviewers communicate their findings by phone or videoconference, followed by a written proposal letter or a final letter.

The guide states that the best supporting evidence is documentation that is dated and specific to the work performed, and that claimants must keep complete and organized records supporting the expenditures they claim.1 If requested information is not provided by the deadline, the review continues.1 Generally, books and records must be kept for a minimum of six years, and a lack of supporting information could result in the partial or full disallowance of a claim.16

Findings and proposal letters

Where the reviewers propose changes, the claimant receives a proposal letter summarizing the proposed adjustments to the claimed expenditures and investment tax credit.1 The claimant may respond in writing, generally within 30 days of the date of the proposal letter; the guide calls this making written representations.1 Where no changes are proposed, the claimant receives a final letter followed by a notice of assessment or reassessment.1 How a claimant can challenge the outcome is set out on the disputes and appeals page.

Service standards

The CRA's published standards are as follows.123

Claim	Standard
Accepted as filed	60 calendar days from receipt of a complete claim
Refundable, selected for review	180 calendar days from receipt of a complete claim
Non-refundable, selected for review	No service standard
Projects with pre-claim approval, expenditure review only	Generally 90 calendar days from receipt of a complete claim

The CRA states that it is committed to meeting its service standards 90 percent of the time.2 The guide notes that where a claim includes projects that differ significantly from what was pre-approved, or projects that were not pre-approved, the CRA may review both the work and the expenditures under the standard processing times.1

Time limits for reassessment

Outside the service standards, the Income Tax Act limits how long the CRA has to reassess. The normal reassessment period is four years from the original notice of assessment for a mutual fund trust or a corporation other than a Canadian-controlled private corporation, and three years in any other case, which includes a Canadian-controlled private corporation.7 A reassessment may be made later in limited cases, including where the taxpayer has made a misrepresentation attributable to neglect, carelessness or wilful default or has committed fraud, or has filed a waiver within the normal reassessment period.7

Representatives and claim preparers

The guide states that claimants have the right to choose a person to represent them, and that a claimant is still legally responsible for its claim even if someone else acts for it.1 In 2023 the CRA asked preparers to make sure their clients and the key employees who worked on a project take part in review meetings, and asked claimants to ask their preparer to include them in conversations with the CRA.8 The CRA has not published review outcomes broken down by the billing arrangement reported in Part 9 of Form T661 in the sources reviewed for this page.

Sources

Canada Revenue Agency, The SR&ED Review Process: A Guide for Claimants (April 20, 2026), sections on the purpose of a review, pre-claim approval, selection for review, withdrawal, how the CRA conducts a review, Steps 1 to 3, and Appendix A. https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/technical-review-a-guide-claimants.html (accessed 11 October 2026). Back
Canada Revenue Agency, SR&ED Program Service Standards. https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/program-service-standards.html (accessed 11 October 2026). Back
Canada Revenue Agency, After you claim, Scientific Research and Experimental Development (SR&ED) tax incentives. https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/after-claim.html (accessed 11 October 2026). Back
Department of Finance Canada, Budget 2025, Chapter 1, section "Enhancing the Scientific Research and Experimental Development Tax Incentives". https://budget.canada.ca/2025/report-rapport/chap1-en.html (accessed 11 October 2026). Back
Government of Canada, Income Tax Act, RSC 1985, c 1 (5th Supp), subsections 231.1(1) and (3). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-231.1.html (accessed 11 October 2026). Back
Government of Canada, Income Tax Act, RSC 1985, c 1 (5th Supp), subsections 230(1) and (4). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-230.html (accessed 11 October 2026). Back
Government of Canada, Income Tax Act, RSC 1985, c 1 (5th Supp), subsections 152(3.1) and (4). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-152.html (accessed 11 October 2026). Back
Canada Revenue Agency, Are you preparing to claim SR&ED tax incentives? Here's what you need to know (tax tip, May 30, 2023). https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2023/preparing-to-claim-sred-tax-incentives-what-you-need-to-know.html (accessed 11 October 2026). Back