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How to Ward off Criminals Purporting to be From SARS

Friday, 30 September 2011   (0 Comments)
Posted by: Author: Beric Croome
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How to Ward off Criminals Purporting to be From SARS

The SARS website contains various warnings to taxpayers about scams used by criminals to obtain banking details of taxpayers, or other means of obtaining personal information illicitly from taxpayers. SARS indicates that taxpayers must not supply their banking details to anyone via the telephone, SMS, or e-mail, as SARS will never request banking details through such channels.

The website contains details of a series of phishing / scam e-mails and letters, which were purportedly sent by SARS to taxpayers, whereas such letters and e-mails were in fact submitted by persons who have no connection to SARS.Taxpayers must remember that under the provisions of the Income Tax Act, Act 58 of 1962, as amended, SARS is empowered to audit a taxpayer's affairs, but in order to do so SARS must make prior arrangements with the taxpayer in terms of Section 74B of the Act. The law also requires that the Commissioner must give the taxpayer reasonable prior notice of a requirement to submit information to SARS, or to conduct an audit.Furthermore, any person arriving at business premises,contending to be a SARS official, is required, upon request, to furnish a copy of an authorisation letter as envisaged in Section 74A of the Act.

The Act specifically defines an "authorisation letter” as a written authorisation granted by the Commissioner, for any person designated by the Commissioner for such purpose, to an officer to inspect, audit, examine or obtain information as contemplated in Section 74B of the Act.Where a person arrives at a business premises without prior notice, demanding access on the basis that they are an official of SARS, such person can lawfully be ejected from the premises and refused access to those premises.

The only occasion whereby a SARS official may arrive at business premises without prior notice is where the High Court has authorised the issue of a search and seizure warrant in terms of Section 74D of the Act.It would appear that a number of taxpayers have received letters purporting to be from SARS which,from close examination, indicate that the letters in question were not issued by SARS but by the fraudsters. It would appear that letters advising a taxpayer that a VAT sales enquiry was to be undertaken did the rounds in Limpopo province during the course of June 2011 and, more recently, in the Sandton area during July 2011. From a review of the letter relied on by the perpetrators of the fraud, it is apparent that the letter is deficient, inter alia, in the following respects:
•Reference is made to the "South African Revenue Services”,which should, in fact, be to the"South African Revenue Service”.
•Reference is made to the "Special Investigations Unit”,which unit does not appear to exist at SARS.
•The letter also refers to a "Regional Controller”, which is not a designation of an official employed by SARS.

Letters of audit normally refer to the rights which taxpayers have in their dealings with SARS.It is unclear what the perpetrators of the fraudulent letters hoped to achieve by advising a business that it is intended to subject that business to one or other tax audit.Taxpayers who receive letters,purporting to be from SARS, which do not contain the details usually reflected thereon, should report the matter to SARS with a view to establishing if the letter was, in fact,issued by SARS or not.More importantly though, taxpayers need to be aware that they do have certain rights in dealing with SARS,and are fully entitled to establish the bona fides of any person alleging to be an official from SARS, who wishes to have access to the business premises.It must be remembered that a person who holds himself or herself out as an officer of SARS, engaged in carrying out the provisions of the Act, is guilty of an offence.

Perpetrators of these frauds can be fined or imprisoned upon conviction of this offence.As indicated above, SARS is required, by law, to make a prior arrangement with the taxpayer to conduct an audit at the taxpayer's premises, and cannot arrive without prior notice.The only exception,where SARS may arrive without prior notice is where the High Court has issued a search and seizure warrant or, alternatively, where there is a criminal investigation and a search warrant has been issued under the Criminal Procedure Act No. 51 of 1977, as amended, which is executed by the South African Police Service.Taxpayers receiving suspicious letters, purporting to be from SARS, need to be on their guard before making arrangements with the perpetrators to audit their affairs, or before they start disclosing personal particulars or banking details to such persons.

Should taxpayers have any doubt whether a letter requesting access to the business records is, indeed, from SARS, legal advice should be sought.

Source: By  Beric Croome (Tax breaks)



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