Minutes: SARS Stakeholders’ meeting Alberton – 24 May 2013
14 August 2013
Posted by: Author: SAIT Technical
Author: SAIT Technical
On Friday the 24th of May, SAICA and SAIT had a
meeting with the SARS Alberton branch to discuss operational issues raised by
our members. The meeting was very interactive and valuable insights were obtained
from both the bodies and SARS. The minutes of the meeting are as follow:
1. Incorrect allocation of PAYE
SARS has allocated the PAYE
payments for the months of May 2009 (R4 697.49) and June 2009 (R4 697.49) to
the UIF account by mistake. Despite having tried to rectify this problem and
having sent a letter to SARS on 19 Feb 2010, requesting SARS to also reverse
the penalties and interest raised as the PAYE form was filled in correct and
payment was made on or before the due date, no response or rectification of the
problem has taken place.
SARS Response: This
particular case is resolved. When there is a misallocation and SARS is
contacted in this regard, then proof of payment must be submitted as soon as
possible to speed up the allocation.
Request for information after five years – EMP 501
submitted manually. Now after seven years SARS is asking for the EMP501. A SARS
official sent a final demand to the client. We replied by submitting proof that
the EMP501was submitted. A different SARS official replied that the
reconciliations were submitted without IRP5’s. We replied that it would not
have been accepted by client service without IRP5’s attached and that it was
more than 5 years ago in any case. We have had no feedback and it still
reflects as outstanding.
SARS response: SARS
follows a checklist approach. This case is an exception as the EMP 501 doesn’t
balance. SARS only wants information which would allow them to determine why it
isn’t balancing. The mismatch was only picked up now due to the taxpayer
applying for a tax clearance certificate. This case was however resolved.
Requesting allocation of incorrect PAYE/SDL/UIF payment
The allocation of
payments were requested for the two reference numbers - allocate R53 752.68
from reference no 1234 to reference number 5678, due to an error when
processing the December 2012 PAYE/SDL/UIF payment as the incorrect reference
number was used. There is a 21 days turn-around time given by SARS, but SARS
has still not fixed the problem. We are now unable to get Tax Clearance
This case involves two different tax numbers i.e. this office and Belville and
has since been resolved. The new Tax Clearance Certificate System will be
implemented next month and taxpayers would be required to give Payment
Reference Numbers (PR Numbers) for reallocations.
SARS is also hesitant to give tax clearance certificates to
taxpayers whose affairs aren’t in order, because as soon as they receive the
certificates, they don’t correct their tax affairs. SARS is however aware of
cases where taxpayers lost tenders due to delays on SARS’ side to issue tax
clearance certificates. In order to overcome this problem, SARS will provide
the professional bodies with an email address to which exceptional cases can be
sent to speed up the whole tax clearance process This will only be cases where
the taxpayer can prove that he’ll lose business if the certificate can’t be
obtained within a certain period of time.
Differences in tax liability between taxpayer and SARS
The money outstanding to
SARS amounts to R2 714.75 in the month of April for the periods August,
September and December 2005 and December 2006. These amounts were settled on
the 25th August 2011 where our client had paid SARS R3 2105.57. Where is SARS
getting new amounts for those old periods?
SARS response: SARS
will look into the matter and provide us with feedback as soon as possible.
5. EMP Registration & Power of Attorney
Applications handed in
and stamped at SARS Randburg just get lost. I’ve submitted an application three
times now and the registration is still not done.
A lady at the SARS
Randburg branch does not want to accept a power of attorney signed by a tax
practitioner even though it has previously been accepted by other SARS
employees. After applying via eFiling,
SARS doesn’t send an email anymore to acknowledge the acceptance or rejection –
you have to phone the call centre.
SARS response: This
matter will be referred to SARS Randburg and feedback will be provided.
eFiling problems – administrative penalties
Information relating to
administrative penalties isn’t always reflected on eFiling. My clients are
phoned by SARS due to the fact that they owe SARS money or third parties are
appointed to collect the money on SARS’ behalf. My clients are unaware of the
cause of these calls, but it seems to be administrative penalties. There is
however no Statement of Account on eFiling for Administrative Penalties or
Administrative Penalty Assessments.
When I call the call
centre, they confirm the admin penalties, but nothing is visible on my
eFiling. I can therefore not file any Request for Remission or objection via
eFiling and therefore have to request SARS to send me the aforementioned forms
Another problem is that
SARS does not give any indication on eFiling of any prior outstanding returns
(despite of them having all of the latest addresses and numbers on eFiling).
SARS also doesn’t provide any attempt to contact taxpayers whose returns are
outstanding. The next thing you know, a third party appointment is issued. I therefore have the following questions:
doesn’t SARS contact the person if all of the person’s information is available
doesn’t SARS indicate any outstanding returns on eFiling?
doesn’t SARS indicate administrative penalties on eFiling?
SARS really have the right to make a third party appointment if they haven’t
informed you of your non-compliance? The taxpayer therefore has no opportunity
to present his/her case to SARS before the employer is forced to withhold the
taxes in terms of the third party appointment.
SARS response: Administrative
penalties are shown on the statement of account. In addition, SARS is also
issuing smses in respect of the taxpayer’s admin penalties as well as bulk
emails (AP34’s). It is important to search for all correspondence from SARS on
the client’s profile.
SAIT states that the
smses are going through to the taxpayer and not the tax practitioner. This is
causing difficulties. SARS reiterates that it sends smses to the cell phone
number that is has on its system which in some cases is the taxpayer’s cell
phone number (as the tax practitioner number is not indicated on their system).
Taxpayers are ignoring smses and not
informing their tax practitioner of the smses and this causes the difficulties.
SARS states that the
communication between SARS, taxpayers and tax practitioners will be escalated
to the national stakeholders meeting to find a suitable solution whereby the
taxpayer as well the the tax practitioner details should be incorporated onto
SARS’s system and taxpayers need to indicate who they would like to receive the
correspondence – themselves or their tax practitioners. SARS also reiterates
that this case is an exception rather than the norm.
e-Filing losing taxpayer information
We’ve submitted transfer
duty declarations on 29 April 2013 and were issued with an assessment. The next
morning we’ve submitted transfer duty declarations for another transfer in
which Mr C is a Party and SARS advised us that Mr C would have to go in to a
SARS office and update his ID number. How is it possible that their records
changed overnight? Also, he actually went to SARS a year ago to update his ID
number. Clearly the SARS e-Filing system is not working properly.
SARS response: SARS is
moving towards single registration in the near future. This will ensure that
all of a taxpayer’s information is streamlined and would therefore prevent
difficulties such as the above.
Feedback on DTR01 errors and ITR14 problems
The taxpayer has been
waiting for feedback on the errors on DTR01's since 25th Jan 2013. I have informed a SARS official of e-filing,
as well as Ms. X at Roodepoort, but they have both stated that they are also
having extreme difficulties getting someone to fully assist from the IT
department of SARS. Also the new ITR14
is not loading correctly on my e-filing profile - when I request any 2013 ITR,
I’m asked to confirm that the entity has ceased trading and that the ITR is the
final one. So, I am unable to lodge any 2013 ITR yet.
The matter will be escalated and a response will be provided.
Final Notification of outstanding debt received before due date
I received a Final Notification of outstanding debt on 20 March 2013,
for the VAT201 for February 2013 which was submitted, and the payment was loaded
on eFiling on 27 March 2013. How can I
get a letter for "Final Notification of Outstanding Debt”, 5 days in advance
before due date?
SARS response: A
SAIT member stated that Mark Kingon acknowledged this general error and that it
Incorrect allocation of provisional tax payment & missing cheque
I have contacted the SARS
Service Monitoring Office and obtained the following case reference number:
1234. I was informed to contact The Accounts Maintenance Department, in respect
of a payment made for the second provisional tax period in 2007, which has not
been allocated to the taxpayer’s provisional tax account. The taxpayer obtained
permission to make deferred payments in respect of the second provisional tax
period for the year of assessment ended 2007. A cheque dated 28 February 2007
of R160 977.89 went missing.
SARS response: This
particular payment went missing due to theft by a different entity and not
SARS. It therefore wasn’t misallocated. SARS is busy with investigations.
Feedback will be provided in due course.
Applying for a Tax Clearance Certificate – SARS records reflects outstanding
We have been applying for a tax clearance certificate (TCC) for
a client who is unable to submit an outstanding EMP501 for 2007. SARS requires
that the reconciliation be resubmitted, but all information and backups were
lost in a burglary. SARS suggested we submit affidavits to this effect. We have
complied with all SARS' suggestions; however, we cannot remove this barrier,
namely outstanding reconciliation for 2007. SARS keeps coming back requesting
it, but the taxpayer is unable to provide any information and we are at a loss
how to proceed.
The taxpayer needs the TCC and SARS has condoned the outstanding
reconciliation for previous years and hasn’t issued the TCC. We have escalated
the matter several times and even had the matter seen to by the Service
Monitoring Office. The latest application, made in July last year, declines the
TCC and cites as reasons the outstanding reconciliation (which we can't solve),
a SDL amount which doesn't correlate to their EMPSA's and an income tax amount
only due at the end of May 2013 which is very bizarre. We would greatly appreciate
some assistance or direction as the taxpayer is turning contracts down because
of it not being in possession of a valid TCC.
SARS response: This case will be
investigated and is exceptional
Non-receipt of income tax refund
There are refunds due to
the taxpayer on the 2010 and 2011 income tax assessments. The refunds are not
being paid due to a SARS audit in progress on the 2011 income tax return, as
explained by the SARS official. The audit has been finalised and no adjustments
have been made, as per the notification received from SARS on 27 February 2013.
Up to date the taxpayer has not received any of the mentioned refunds. The call
centre was also contacted and case number was received.
SARS response: The
refund was released and the audit was finalised but another risk was identified
for governance purposes. The case was sent back to the audit department and is
now finalised. The refund was repaid and interest will also be refunded.
Non-acceptance of an ADR1 form
We submitted a formal
objection on the ADR1 form the first time on the 26th of April 2012,
and 3 times thereafter: 13 August 2012, 29 October 2012 and 15 January 2013.
SARS kept sending it back for not being submitted in the right format. I went
to see the practitioner department at the Randburg branch and spoke to Y. She
confirmed that it was indeed the correct format so we submitted it again and it
came back once more. We met with the Alberton practitioner branch, they emailed
it to Alberton assessment centre and it is still not processed.
SARS response: The
objection wasn’t lodged within the prescribed three years and is therefore
rejected. SAIT member requests that SARS provide adequate reasons when rejecting
an objection – such as "period to object has prescribed” . SARS responds that
they do give reasons in the notice but will consider the above.
with exemption being assessed despite of exempt status
ABCD is a section 21 (NPC),
and a PBO with exemption from 7 March 2003, which were never withdrawn. It
received a judgement via post on 4 February 2013 for R600 803.77. It looks like
some official raised an assessment in 2005 against this company, ignoring its
PBO status. The company never received it and was unaware of any tax liability.
An objection was lodged on the 8th of February 2013. No reply was
received to date. The call centre informed me that the objection is disallowed
because of the prescription of 3 years after the assessment date.
SARS response: PBOs
are assessed on their "non-PBO income”. This case will be escalated.
Incorrect payment allocation leading to the denial of a TCC
We had a hearing with
SARS in 2007. A. The case was resolved. My client had to pay an amount in and
we paid it over 6 instalments. Now his tax affairs are still not sorted out and
there is an amount outstanding with loads of interest. He cannot get a TCC, and
now loses an immense amount of work from Company Z. The company is facing
SARS response: The
taxpayer incorrectly used his VAT number for income tax purposes. This case is
16. Interest levied on VAT
The November and
September 2011 VAT 201 (with a refund due) was submitted in February 2013, as
we by error submitted the returns for the wrong periods. An audit was conducted
and finalized. The accountant rectified this by submitting the correct VAT 201 return,
as well as an ADR1 form for the penalties and interest, stating that it was an
innocent mistake. To date, which is approximately 3 months later, the refund is
still not released by SARS and we are accruing further interest on the
outstanding amounts, although in essence SARS still owes us a credit. We have
lost the interest portion on this R900 000 refund. A complaint was also lodged
at the SSMO to no avail.
SARS response: Risks
were identified on the assessment that must still be investigated. SARS
therefore made an error in giving notification that the audit was finalised. As
soon as the audit is finalised, the refund will be released. SAIT stated that
SARS in such circumstances, should inform the taxpayer of the problem and keep
the taxpayer updated with the progress of the audit.
Assessment issued before responding to the letter of findings
An assessment was issued before I responded to
the letter of finding and updating the system that I have agreed to the
SARS response: This
case is still under review and the vendor will be notified of the outcome as
soon as it is finalised. SARS also reiterates that the letter of findings is
Withdrawal of money from Vendors bank account
SARS issued their
standard letter requesting supporting documents to be submitted on the VAT 201
declaration of July 2011. The supporting documents were uploaded on eFiling.
After further requests from SARS, the physical documents were hand delivered at
the Springs SARS office. The documents were again submitted on eFiling. A VAT
assessment was issued by SARS, against which the vendor objected. More than R60
000 were withdrawn from the Vendors' bank account by SARS whilst the money
wasn’t due to it.
Normally the time between the uploading of supporting documents and the
conclusion of the audit doesn’t correspond. This can result in an error. An ADR
must be submitted by the vendor. SARS is going to give this case specific
attention and will provide a response. A SAICA member reiterates that this treatment
by SARS is not acceptable. SARS responds
by saying that they had meetings with their debt collectors in the past to
ensure that this doesn’t happen again. The number of similar cases has been
greatly reduced. SARS explains that this is an old case that relates to 2011.
response to an objection - VAT
We did an objection for
the VAT period October 2011 and SARS has still not gotten back to us. Our
initial case number is 1234 which is the case number for the objection dropped
at the SARS Edenvale branch on the 15th October 2012. We contacted SARS in
January 2013 with case number 5678 and they had made no progress. I called again
in April 2013 with case number 1357 and there is still no progress.
SARS response: This
case is already resolved.
Change of Lump sum code to Bonus income code
The tax official changed
the original Lump sum code to a Bonus income code on the additional assessment
after the supporting documents were verified. Why was this change necessary?
SARS response: SARS
didn’t have the IRP5 for the lump sum. SARS doesn’t prepopulate IRP5’s, but
merely uses the IRP5’s provided to it to prepopulate the returns and the
taxpayer or his representative has to include it in the return should it not be
included. Thus, if an IRP5 is not included on a pre-populated return, then the
taxpayer must click the block on the return itself which will allow an IRP5 to
be manually populated on the return. SARS reiterates that a taxpayer must
declare all income and if one doesn’t, then no reasonable care has been taken.
SARS not sticking to the 60 days for objection – threatening to take legal
action on debt in dispute
An objection was lodged
for the 2010 assessment on 21 Dec 2012. Upon follow up, a SARS call centre
agent advised me that objections take 60 working days to finalise. It has been
over 80 working days and the objection is still not finalised. We received a letter
dated 15 April 2013 requesting further supporting information. SARS has
exceeded their service delivery and they are threatening to take legal action
on the outstanding income tax debt, part of which is still under the objection.
SARS response: When
we receive an objection, we test it against the following four requirements:
1. The objection must be
lodged within 30 days of the date of assessment (the postal strike is a valid
reason for the late submission of an objection).
2. If it is not submitted
within 30 days, then reasons must be provided by the taxpayer.
3. Proper and detailed
grounds of objection must be provided.
4. The address of the
taxpayer to which correspondence can be sent must also be provided.
If any of these four
requirements are not met, then the objection is regarded as invalid.
Next SARS looks at the
reason for objection and the supporting documents. SARS must then make a
decision within 60 working days. The 60 working days starts the moment a
taxpayer submits its Notice of Objection. It is very important to submit the supporting
documents with the Notice of Objection to ensure a speedy response from SARS.
This is because SARS’ response time of 60 days stops until the taxpayer has
submitted all of the supporting documents.
certificate rejected, even though supporting documents were submitted.
I submitted supporting
documents, with a RA certificate included. The official finalised the return
and disallowed the RA because no proof was submitted.
SARS response: SARS
acknowledges the error and this case will be corrected in due course.
Objection to deductions
Mr A earned income from
three sources as consultant to companies. All the supporting documentation
(proof) were submitted in respect of the deductions claimed to fax no: (031)
3286018 and to email@example.com on the 29 November 2010. No responses were received from SARS. An
e-Filing Notice of Objection was submitted on 9 June 2011 and 23 June 2011. I
received a response to a further notice of objection on the 10th of
August 2011. Objection regarded as finalized.
response: The email address given
above is wrong. SARS has sent out various letters to the taxpayer on 21 of June
2011, 14 of July 2011 and the 18th of July 2011 and after no
response, the objection was disallowed. Therefore the taxpayer didn’t respond
within 60 days and the objection is invalid.
Incorrect allocation of medical aid contributions
While submitting the 2012 tax return, we
accidentally captured the medical aid under the contribution code 4005. The
medical aid was however already accounted for on the IRP5. This was purely
human error and I would like SARS to reverse the additional tax for the
overstated medical aid.
response: No reasonable care was
taken while completing the return. The taxpayer would be required to submit a
Notice of Appeal. SARS, however, reiterates that they would no longer accept
human error from tax practitioners as a valid excuse.
SARS levying additional tax, even though all documents regarding the taxpayer
SARS has imposed
additional tax for the omission of income for the amount of R104 544.81.
All documents were sent to SARS and nothing was withheld regarding his tax
return so we would like to know what the additional income is as we do not
understand where this amount comes from.
SARS response: Refer to our
response in query 20.