Penalty phase

Coming in the next version of Form T661, mandatory from January 1, 2014; questions about the claim preparer. The business number of any practitioner or consultant who helped prepare a SR&ED claim, with details about the billing arrangements, including whether contingency fees were used and the amount payable, will become “prescribed information”. Taxpayers filing their own claims will be required to certify that no preparer assisted in any aspect of the preparation of the claim.

A penalty, $1,000 per claim, is to be imposed if prescribed information is “missing, incomplete or inaccurate”. The taxpayer and claim preparer will be jointly and severally liable, which means it’s left up to them to sort out who pays.

It appears that the penalty will apply only to prescribed information concerning the claim preparation, not all of the prescribed information submitted with the claim. 

No word yet on how complete and accurate information on the amount payable under a contingency arrangement can be provided at the time the claim is filed.