Don’t let an audit tax you

The best way to negotiate the dreaded tax audit process, and prevent the possible devastation of any assessments issued afterwards, is for taxpayers to know their rights.

Sars has wide, but not unshackled, powers and when it issues an assessment against a taxpayer, it’s bound by the rules under the Tax Administration Act.

The process following an assessment is strictly regulated by these rules, which affords taxpayers multiple mechanisms to ensure the dispute process is conducted fairly.

However, if not heeded properly, these rules are a double-edged sword that can be a taxpayer’s downfall.

One’s acquaintance with tax law and the dispute resolution process, or lack thereof, has a direct bearing on the course of proceedings and the ultimate outcome of a tax dispute.

Ignorance of the law and the rules can result in calamity for the taxpayer, regardless of the fact that he/she had a valid claim.

Taxpayers are advised not to go down the tax dispute resolution road alone, but rather call in the help of an attorney knowledgeable on tax law and how to traverse the obstacles of tax disputes.

Jean du Toit is an attorney at Tax Consulting SA

Moneyweb

Accept and understand that paying off a mountain of credit card debt or a car or even a house in an aggressive timeframe isn’t impossible.

When I decided to try to be debt-free by 35, the most important change I had to make was to live below my means. This is especially true in the two largest purchases you’ll likely make: your car and house. Buy below what you can afford.

If you think you can afford a R1.2 million house, buy one for R800 000.

Often, people get caught out with the hidden costs of home ownership: levies, rates, insurance and maintenance – these can easily add R5 000 to your monthly bill.