KEY TAKEAWAY POINTS:
- SARS has 21 business days to complete a verification
- They may finalise it with or without changes
- If they take more than 21 business days, you have a right to lodge a complaint
- If nothing happens, you may take the matter up with the office of the tax ombud
- Remember to keep a proper track record of the matter and/or any follow-ups you make on the matter
- In this article, we discuss what verification is, what to do when you are selected for verification and if SARS does not bother to get back to you on time.
SARS has capacity issues that they are working hard to resolve, But, it seems this 2021 tax season they took more than what they can handle.
We have observed many taxpayers who have been selected for verification but who have not heard back from SARS many days after the verification was initiated. Under normal circumstances, SARS has up to 21 working days to finalise a verification and issue a finalisation letter and/or final or adjusted assessment.
In one case we have looked at, for example, the taxpayer who was selected for verification on 29 July 2021 has not heard back from SARS even at the time of writing this article. We are certain, she is not alone in this.
Let’s look at some important definitions before we can consider what one must do if SARS takes their time on the verifications.
What is verification?
Being selected for an audit and verification are two different processes. With a verification, SARS is doing a face value verification of the information declared by the taxpayer on the declaration or in a return. This involves the comparison of the information on the return against the financial and accounting records and/or other supporting documents. All this is to ensure that the declaration/return is a fair and accurate representation of the taxpayer’s tax position. (Remember, in terms of the Tax Administration Act, the onus is on the taxpayer to provide supporting documentation to prove that the deductions and information on their declaration are reasonable, fair and accurate.)
Who can be selected for verification?
Any taxpayers can be selected for a verification process for the proper administration of tax. The selection can also be done on a risk basis. What should you do if you are selected for verification?
What should you do if I am selected for verification?
SARS will notify the taxpayer if they have selected them for verification. The letter issued will state what the taxpayer must do or provide to SARS. The letter will also notify the taxpayer to check their tax return and to make any corrections if there are any discrepancies on their tax return. The taxpayer will be given 21 business days from the date of the letter in which to provide the supporting documents and schedules. These documents and schedules can be submitted via eFiling or SARS support documents portals.
During the verification, you can expect to get another letter requesting additional information if the relevant material initially supplied was not sufficient to finalize the verification. If you are due for a refund, you may not get this until the verification process is finalised.
What happens if you do not respond to the verification?
It is always important to keep an eye out for SARS correspondences on your email or eFiling. Normally SARS sends you a message and email when they have issued important notices.
If you choose not to respond SARS may:
- Issue a second letter reminding you to submit relevant information
- Issue a final request for relevant information
- If you still do not respond, a SARS official will contact you telephonically and request that you submit the necessary relevant material within 5 business days.
- Should you still not respond, SARS may raise an assessment based on information readily available or obtain from a third party.
Now let’s consider what your options are if SARS ghosts you.
What if you have complied/responded but SARS takes all the time in the world on the verification?
There is the office of the tax ombud that can help with operational issues. But, it does not get involved before you have exhausted all internal SARS complaints mechanisms. You can only go directly to the office of the tax ombud only if there are compelling reasons to do so.
So, the first step to take is to complain to the SARS complaints office. To do so, you must be sure that the matter is now outside the normal service period, as in the example we have earlier about the taxpayer who was selected for verification on 20 July and has not yet back from SARS ever since.
There are three ways through which one can complain with SARS:
- Via eFiling. See the step-by-step guide on how to complain eFiling. Please note that you have to be registered on eFiling to be able to do this. You may not download or print the form to send it by any other means. You must also have a valid case number to which your complaint relates.
- By visiting the branch. If you do, you may need to ensure that you have spoken to all relevant higher people before you leave the branch. Due to covid, you may need to make an online appointment.
- By calling the SARS Complaints Management office (CMO) on 0860 12 12 16.
Do not call the call normal call centre and say you are following up on an unresolved matter, the call centre agents may just “escalate” your case and normally that achieves very little. If your complaint is not resolved after 21 working days, you may take the matter to the office of the tax ombud.
Here are a few tips on winning the battle against SARS poor service/administrative issues and making sure you have a winnable case when you approach them or the Tax Ombud:
If you have a complaint, it is better to call the Complaints Management Office (CMO.) If you call the SARS contact centre to get a reference number, specify that it is a complaint with a complaint, specify that it is a complaint and not a follow-up. If you keep calling the call centre and saying you are following up, it may remain just that, a follow-up. You need to specify that you have a complaint so that it is treated as one. Some complaints will need case numbers, make sure you call the contact centre to get one.
Build a compelling case:
The most important thing to do when dealing with SARS is to build a good case, this is whether you are raising a complaint, an appeal or an objection. You will need a system to record your interactions with SARS (at each touchpoint with them). You also need to store documents and supporting documents relevant to the taxpayer’s case. The system of recording your interactions with SARS should allow you to build a timeline of how the case is developed and to ensure that you have all the documents you need for this case.
One such system is to make sure each client file/folder contains relevant subfolders that will help you gather the important and necessary information. The other is to build a dashboard that records the timeline and communications with SARS. This can take any form, for example, Word or Google docs, a task management tool like Asana, Trello or Monday.com.
NB: You do not do this because something has gone wrong, but because things may go wrong and often they do go wrong, but because things may go wrong.
The advantage of doing things this way is that you will save yourself a lot of time when doing the actual complaint, even an appeal or objection. The Tax Ombud form will ask you to summary your case in chronological order. So, if you had been building a case over time, this process will be a breeze. You have all the facts and timeline at your fingertips.
Do you need help with your SARS matters? Contact us here