What is an FTCAS: First-time claimant advisory service?
The first-time claimant advisory service (FTCAS) is a free, mandatory service conducted either via video or teleconference. During this meeting, first-time scientific research and experimental development (SR&ED) claimants can meet with local Canada Revenue Agency (CRA) SR&ED staff to learn more about the SR&ED Program.
If you are a first-time SR&ED claimant selected to receive the FTCAS, you will be notified by letter from your local CRA office. You will then be contacted by a CRA official who will arrange a convenient time for the visit.
When you receive a notice that you’ve been selected for an FTCAS, it means your claim has been pre-approved. Once you complete this information session, your refund will be issued to you.
What will happen in an FTCAS?
The FTCAS session is run by 2 reps from the CRA – a technological reviewer and a financial reviewer — and will take 1-2 hours.
During this visit, the SR&ED reviewers will talk about:
- how to identify potential eligible work within the context of your business;
- how to identify allowable expenditures;
- the types of documentation and other evidence that could support a claim; and,
- how to complete and file future SR&ED claims.
The FTCAS is not intended to be a review or an audit and the CRA staff will not decide to deny your claim if they feel the goals of the session aren’t met. Some reviewers may decide to discuss claimed SRED projects on a very detailed level, just like during an audit. In this case they provide a detailed explanation and report regarding their opinion about eligibility of the work submitted, but there is NO mandate to change, reduce, or disallow the claim. Even if a project is scrutinized and deemed ineligible with a detailed explanation, and no matter how good/bad the evidence/documentation is, the FTCAS-ed claim is “accepted as filed”. HOWEVER, the auditor’s opinion and notes in the system could affect the decision to audit the NEXT claim.
Our experience has shown that:
- There is a lot of variability in how FTCAS meetings are conducted. In some meetings, the reviewers did not ask a single question about the claim, but simply did their presentation. In others, it was like a real audit. Other meetings were a combination of both.
- The outcome of the FTCAS meeting CANNOT affect processing of the FTCAS-ed claim, but it CAN affect probability of the next claim being selected for the audit.
This service is for the reps to learn about your business, and provide first-time claimants with all the information necessary to successfully file their next SR&ED claim. If you can demonstrate that you are fully complying with the program, you may reduce your chances of a full review in the future.
After the visit, you will receive a report outlining what was discussed during the visit and recommendations on improving future claims, if any. Should a refund be expected as a result of filing a claim, it will be processed after the site visit.
Ultimately, the desired outcome of the service is for CRA officials to see that you’re in complete compliance with the SR&ED program. And the hope is that by educating claimants on the above, it will increase the potential for claims to avoid a review in the future.
SRED Unlimited can Help!
Your SRED Unlimited consultant help you in many ways. We completely manage the information gathering and report drafting and presentation to emphasize how your project work complies with the SRED program. We can provide guidance on how to prepare and present documentation if it’s requested by the representative. We can coach you on how to present a good, SRED-compliant picture of your company to CRA Reps. We have coached many first-time claimants through the FTCAS process.
It’s worth a 15-minute call to let us help you through all the points of your SR&ED tax credit submission.