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Minutes: SARS Stakeholders’ meeting Alberton – 24 May 2013

Wednesday, 14 August 2013   (0 Comments)
Posted by: Author: SAIT Technical
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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 payment 

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. 

2. Request for information after five years – EMP 501

Reconciliations were 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.

3. 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 Certificates.

SARS response: 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.

4. 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. 

6. 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 via post. 

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:

  • Why doesn’t SARS contact the person if all of the person’s information is available on eFiling.
  • Why doesn’t SARS indicate any outstanding returns on eFiling?
  • Why doesn’t SARS indicate administrative penalties on eFiling?
  • Does 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.

7. 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. 

8. 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.

SARS response: The matter will be escalated and a response will be provided. 

9. 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 is resolved.

10. 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. 

11. Applying for a Tax Clearance Certificate – SARS records reflects outstanding EMP 501 

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

12. 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. 

13. 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. 

14. PBO 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.

15. 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 bankruptcy. 

SARS response: The taxpayer incorrectly used his VAT number for income tax purposes. This case is however finalised.

16. Interest levied on VAT refunds

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.

17. 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 findings.

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 now automated. 

18. 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.

SARS response: 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.

19. No 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.

20. 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. 

21. 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.

22. RA 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.

23. 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 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. 

SARS 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.

24. 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.

SARS 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. 

25. SARS levying additional tax, even though all documents regarding the taxpayer were submitted 

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.



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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