By this time some taxpayers are receiving outcomes for verification processes. Provisional taxpayers are getting ready to submit and may be selected for a verification. With this in mind, it is important for us to consider what happens if one is selected for a verification by SARS and what a verification outcome may be.
What is a 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 in order to prove that the deductions and information on their declaration is reasonable, fair and accurate.
Who can be selected for a verification:
Any taxpayers can be selected for a verification process for the purpose of proper administration of tax. The selection can also be done on a risk basis.
What should I do if I am selected for a verification:
SARS will notify the taxpayer if they have selected them for a 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 correction 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.
The supporting documents or schedules can be submitted via eFiling or manually at the SARS branch near you.
During the verification, you can expect to get another letter requesting for additional information if the relevant material initially supplied was not sufficient to finalize the verification. If you are due for a refund, you may nit get this until the verification process is finalised.
What happens if you do not respond to the verification:
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 obtained from a third-party.
NB: It is always best to respond to all queries as quickly as possible. There is a possibility of penalties and interests
What to expect when a verification is completed:
You will receive a completion letter notifying you of the verification outcome. If all went well, this letter will normally notify you that no adjustments have been made. In that case, SARS will not be making adjustments to their assessments. If you are due for a refund, it should be paid out in 7 working days (provided you have no tax debt due or outstanding tax returns from prior years). If you were the one owing SARS, the amount due will remain payable.