Sunday, January 16

Sars incorrectly withdraws the refund from a taxpayer’s bank account

As the South African Revenue Service (Sars) replaces warm bodies with technology, taxpayer frustration is mounting.

Gert van Heerden, senior manager of legal services for the Office of the Tax Defender (OTO), in a discussion with Moneyweb, said that there has been a failure of proper communication between Sars and taxpayers.

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Read: Sars Versus Contributors

The OTO recently came to the aid of a taxpayer after Sars had paid a taxpayer a refund, then immediately withdrew it from the taxpayer’s bank account.

The taxpayer had filed an income tax return for the 2018 tax year. A refund of approximately R13,000 is owed to the taxpayer. The Sars issued a verification letter requesting the taxpayer to submit the supporting documents for the 2018 tax year. After considering the documents provided by the taxpayer, the Sars raised an assessment to disallow the tax credits. This resulted in a tax debt owed to the Sars. After the taxpayer successfully challenged the appraisal, Sars reviewed the appraisal to reinstate the original refund.

However, two months after the dispute ended and the appraisal was reviewed, the taxpayer complained to the OTO that he still could not access his refund.

The OTO found that in 10 separate cases over a two-week period, Sars paid the refund into the taxpayer’s bank account and then immediately withdrew it.

At no time did Sars provide reasons for the actions it took, and the OTO was also unable to find any legal or reasonable basis for Sars’s actions.

The OTO accepted the taxpayer’s case on the basis that Sars had improperly withdrawn the refund from the taxpayer’s account.

The OTO recommended that the Sars pay the taxpayer the income tax refund for the 2018 tax year without further delay. Alternatively, the Sars must provide valid reasons for refusing to do so.

After the OTO’s intervention, Sars finally paid the taxpayer refund.

Read: Tax Defender forces Sars to account for actions of questionable legality

How to get OTO assistance

The OTO has shown that sometimes filing a formal complaint with the OTO is the only solution for taxpayers to have their tax matters dealt with fairly by the Sars.

However, the taxpayer must first follow the correct process for Sars to address the complaint.

The complaint can be filed on eFiling and the taxpayer will receive a case number. The taxpayer should not file the same complaint twice.

If the Sars does not address the complaint, the taxpayer can return to the OTO.

Verification of tax return details

By scraping the barrel for ripe fruit, Sars has increased verification of supporting documents to confirm details submitted by a taxpayer on their tax return, particularly if the taxpayer is owed a refund.

The taxpayer will receive an email: “Dear Taxpayer, An important notification has been issued and is attached to this email. Respond or act as directed in the letter. “Although this may look like a phishing email, the attachment will indicate that supporting documentation should be submitted.

The verification letters are issued by a computer and will not have been tailored to the taxpayer’s information.

Therefore, a taxpayer can be required to submit a Retirement Annuity (RA) certificate even if they have not claimed an RA deduction.

The taxpayer must also provide the “original” of this letter with supporting documents. Sars doesn’t explain how to get the “original”. Practically all the taxpayer can do is print this letter and upload that file via eFiling along with their other supporting documents.

But from now on, the taxpayer may experience delays.

Document verification may not finish in 21 days. After verification is complete, the refund may not be accessible. Although the tax assessment reflects a credit and the verification is complete, there may be no communication from Sars.

Read: Tax disputes gather dust

Contacting Sars for a status update

The Sars Call Center now offers a menu of limited options. You may be able to access a voice message stating that the verification exercise has been completed, but there is no information about refunds.

Electronic filing accounts for taxpayers now have a virtual assistant who urgently needs training.

If you request a verification status, you will receive a message: “An unexpected error has occurred. We apologize for any inconvenience!”

Van Heerden said tax professionals have alleged that they can wait hours for a call to be answered, and once it is answered, the person receiving it will deliberately dismiss it.

Moneyweb received the following comments from tax professionals

  • The Sars rejects many objections without providing a sufficient basis for rejection (as required in terms of Section 106 (5) of the Tax Administration Act).
  • The Sars must improve its treatment of many taxpayers who comply or strive to comply.
  • When taxpayers have been mistreated by Sars, do they ever get a letter of apology from Sars? Are concerned officials ever reprimanded?

Van Heerden is of the opinion that 90% of taxpayer complaints could be avoided if taxpayers could have a conversation with the tax officer handling their matter. Taxpayer education is also essential, “and Sars should be mandated to do this.”

Read: Tax Ombud launches #TaxpayersRightsMatter campaign

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