Getting SARS to unfreeze a bank account
14 November 2014
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: We submitted a
return for a client, who then received a refund from SARS and then 3 days later
SARS froze her account. When we contacted them they said the company did not
pay PAYE and they are currently auditing her and the company. What grounds do
we have for SARS to unfreeze the account, because according to the tax
administration act SARS must treat clients fairly?
They are not doing this at the moment with the client. What
can we do to assist the client with unfreezing the account? According to me the
refund that was paid out should be reversed, because the company did not pay
PAYE so the client cannot receive her refund, but tax was deducted what now?
A: To "freeze”
the bank account SARS would have to get a preservation order in terms of
section 163 of the Tax Administration Act.
The provisional order obtained by SARS requires confirmation by the
court, whereby the taxpayer can make a case that it not be made final or have
it set aside (section 163(4)).
A notice should have been sent to the taxpayer in this
regard (section 165 TAA).
From a practical approach, the taxpayer would have to
contact the bank and SARS Call Centre to confirm that a preservation order
applies. If the bank cannot produce the
preservation order obtained by SARS they should be instructed to "unfreeze” the
account or be added as party to any legal application.
We can only think that SARS would follow this approach if
the employee and company are connected persons.
Please confirm whether a preservation order applies and
whether the employee/employer are connected persons.
The matter can be reported to the Tax Ombud, but should
follow if SARS did not follow the law in freezing the account, though it is in
itself probably not a practical remedy to the problem at hand.
Disclaimer: Nothing in
this query and answer should be construed as constituting tax advice or a tax
opinion. An expert should be consulted for advice based on the facts and
circumstances of each transaction/case. Even though great care has been taken
to ensure the accuracy of the answer, SAIT do not accept any responsibility for
consequences of decisions taken based on this query and answer. It remains your
own responsibility to consult the relevant primary resources when taking a