Tax payers are often faced with assessments issued by SARS that they do not agree with. This article looks at the steps to follow once an income tax return has been filed with SARS and the options available to you if you are not in agreement with the assessment. Understanding the process and especially the strict deadlines within which you must act will enable you to make informed decisions which may result in more cash in your pocket.
Once you have submitted your income tax return to SARS it is important that you regularly check the status of your income tax assessment, either via eFiling or telephonically with SARS. It is important that you know when you have been issued with an assessment, because you need to act on that assessment within strict prescribed deadlines. If you miss these deadlines the assessment will become final. Luckily the blade cuts both ways and SARS also have deadlines to adhere to.
Once you have received your income tax assessment, you need to check that the assessed taxable income or the assessed loss and any outstanding income taxes payable to, or refunds due from, SARS are equal to what you anticipated. If you are not satisfied, the following steps must be taken:
Request the detailed reasons from SARS as to how the amounts were assessed.
TIP: When you receive your assessment and you are not satisfied ALWAYS request detailed reasons from SARS. This will give you an automatic extension and the reasons will enable you to compile a more detailed objection.
Deadline: This request for reasons must be delivered to SARS within 30 business days from the date the
assessment was issued.
SARS have 45 days to respond to your request with the detailed reasons OR
30 days to respond with a notice stating they did provide adequate reasons. In this notice SARS must indicate the detail of the document in which the reasons were already provided.
When the reasons are provided and you are still not satisfied you may lodge an objection at SARS against the assessment.
The required forms to complete are:
Income Tax = NOO (Notice of Objection on eFiling or you can go to the SARS Branch and ask them to complete the the NOO)
VAT and PAYE = ADR1 (SARS website)
Deadline: The objection must be lodged with SARS within 30 business days AFTER –
1. The date of the assessment IF you did not request detailed reasons.
2. The date you receive the Notice from SARS saying they did provide you with adequate reasons.
3. The date you receive the Notice from SARS providing the detailed reasons as to how the amounts were assessed.
At this step you have lodged your objection and now you need to know the deadlines SARS must adhere to AFTER the delivery of the objection –
1. within 30 business days SARS must issue a request to you if they require additional information.
NOTE: You must provide the relevant information within 30 business days of delivery of the SARS notice.
SARS have 45 business days after they received the requested documentation to finalise your objection.
2. 60 business days to finalise your objection if they do not require any further documentations from you.
As soon as you receive the outcome of the objection and you are still not satisfied you may lodge an Appeal at SARS against the assessment.
NOTE: The appeal MUST be on the same grounds as the objection.
The required forms to complete are:
Income Tax = NOA (Notice of Appeal on eFiling or you can go to the SARS Branch and ask them to complete the NOA)
VAT and PAYE = ADR2 (SARS website)
Deadline: The appeal must be lodged with SARS within 30 business days AFTER receipt of the disallowance of the objection.
Two processes can be followed:
– First an informal process which entails that all parties meet with an independent ADR arbitrator who will lead discussion trying to resolve the issue before having to take the case to the Tax board / Tax court; OR
– If you decline the informal process and take the appeal straight to the Tax Board / Tax Court for the formal process.
What can you do if SARS do not adhere to their deadlines –
1. You can lodge a complaint at the SARS Complaints Management Office (CMO) on 0860 12 12 16 or on eFilling (detailed guide on SARS website how to lodge a complaint.) This office must resolve the issue within 30 business days.
2. If the CMO do not adhere to their deadline or you are not satisfied with their response you can refer the matter to the Office of the Tax Ombud on 0800 66 28 37. This office endeavour to resolve a matter within 15 business days according to their official website www.taxombud.gov.za.
I trust that after this article you realise that you should follow-up on your assessment after your return was submitted and if required be meticulous in preparing your objection so as to avoid unnecessary delays in the resolution of the dispute with SARS. It is therefore crucial that you refer to SARS’ findings when objecting, provide adequate proof, appropriately apply the relevant tax law and most importantly keep within the set deadlines.
If you have any enquiries, please contact Petri Westraadt at email@example.com