Dealing with the taxman is part of adulting, but if you don’t follow the proper procedures it can be downright frustrating. A complainant recently had his dispute with the South African Revenue Service (SARS) resolved only after the Office of the Tax Ombud stepped in.

Gert van Heerden, senior manager of legal services and systemic investigations at the tax ombud, says that both the consumer and SARS failed to follow the correct procedures.

The consumer’s complaint related to his VAT submission for May 2018. When he received an assessment, he submitted an objection on 3 September 2018, asking SARS to supply reasons for the assessment. However, Van Heerden says SARS has a specific process and there is an option to “request reasons for assessment” before proceeding to an objection.

When the taxpayer jumped straight to an objection, SARS invalidated this objection because he had not followed the proper procedure. However, SARS did respond to him on 19 September 2018, providing reasons for the assessment and advising him that he could now place an objection if he so desired.

“Sometimes SARS does supply reasons and the taxpayer can jump straight to lodging an objection. In this case, because the sole reason for lodging the objection was to request reasons, it was invalidated,” Van Heerden explains.

You have 30 days from the date of receiving your assessment to lodge an objection, or 30 days from the time SARS supplies you with a reason for the assessment. If you don’t file your objection within the specified timeline, you can then submit it late and ask SARS for a “condonation” or to overlook the delay.

On 15 October, after SARS had supplied the reasons for its assessment, the taxpayer duly submitted an objection and, this time, SARS incorrectly passed the objection through for a condonation and only allowed the “late” filing on 24 October 2018.

So, the taxpayer made a mistake, then SARS made a mistake.

The taxpayer then made a second mistake and used the objection option to SARS for a “detailed calculation of the penalty”.

Van den Heever explains that, at this point, the SARS automated system correctly kicked back the objection, but there was a delay and this only happened on 12 December 2018.

“Now it’s three months later and you can understand the taxpayer’s frustration,” he says.

The ombud’s office then further criticised the taxpayer for lodging two identical objections, just minutes apart from each other, on 28 January 2019. One of these objections was automatically rejected as a duplicate, but the ombud’s office says the filing of duplicate objections would have taken up valuable time that a SARS official could have spent resolving another taxpayer’s dispute.

At this point, the taxpayer lodged a fifth objection, calling into question the penalties for understating the VAT for this particular return.

SARS then incorrectly invalidated the objection, referring to invalid invoices claimed in the tax period and that are not subject to objection (and to which the taxpayer had not objected).

Frustrated beyond all measure, the taxpayer approached the Office of the Tax Ombud for assistance and the protracted dispute was ultimately resolved.

Van Heerden concluded by saying taxpayers have a right to object to decisions taken by SARS on their tax matters. However, you need to follow the correct procedure, and

SARS is bound by the same rules for dispute resolution.

“Even more frightening is that there was an appointed tax practitioner working on this case on behalf of the taxpayer. The practitioner should have been familiar with the correct procedure but it seems that he was not. The situation was further exacerbated by errors on the part of SARS as well,” Van Heerden says.

The Office of the Tax Ombud this week released a draft Compendium of Taxpayer Rights, Entitlements and Obligations, which ombud Judge Bernard Ngoepe says will be an important document for improving the South African tax administration system and accountability on the part of SARS.

“The Compendium will go a long way towards empowering taxpayers with knowledge about their tax rights and obligations and to understand the level of service they are entitled to from SARS,” says Ngoepe.

“It is important to note that whilst the Office of the Tax Ombud champions taxpayer rights, we also promote tax compliance; all we want is to ensure that taxpayers pay what is due, not a cent less or more,” he concludes.

The draft Compendium is available at www.taxombud.gov.za. DM168