Trick­sters on the prowl

Sars warns tax­pay­ers in wake of scam and un­eth­i­cal prac­ti­tion­ers de­mand­ing a cut


THE END of the 2018 tax fil­ing sea­son for non-pro­vi­sional tax­pay­ers is fast ap­proach­ing the ear­lier cut-off time, with re­fund trick­sters also try­ing their best to meet their tar­gets.

The SA Rev­enue Ser­vice (Sars) said a re­cent scam with prom­ises of med­i­cal ex­pense re­funds was not new. Em­ploy­ees were promised re­funds on fab­ri­cated claims if they paid the trick­ster 20 per­cent of the re­fund.

“We mit­i­gate this risk through the use of third party data. In the cur­rent fil­ing sea­son, we have gone to the ex­tent of pre-pop­u­lat­ing the in­for­ma­tion and re­duce the abil­ity of ma­nip­u­lat­ing in­for­ma­tion out­side the norm of ac­cept­able vari­ances against what ap­pears on the med­i­cal aid tax cer­tifi­cates.”

A Sars spokesper­son said where dis­crep­an­cies arose, they were flagged for ver­i­fi­ca­tion or an au­dit.

Sars has also warned tax­pay­ers about tax pre­par­ers who prom­ise them re­funds in re­turn for a per­cent­age of the re­fund.

“Fraud is of­ten com­mit­ted in the name of the tax­payer by claim­ing fraud­u­lent ex­penses. When Sars does iden­tify this fraud the tax­payer will be li­able for the full debt as well as penal­ties,” Sars warned.

Chris van Dyk, a le­gal ad­viser for the SA In­sti­tute of Tax Pro­fes­sion­als (SAIT), said their code of con­duct specif­i­cally stated that charg­ing a con­tin­gency fee for the com­ple­tion of tax re­turns was not an ac­cept­able form of re­mu­ner­a­tion for tax prac­ti­tion­ers. SAIT mem­bers were ex­pected to ad­here to the code of con­duct.

“We are aware of the fact that this is a con­tentious is­sue and that there is a pre­vail­ing prac­tice in the mar­ket to charge a con­tin­gency fee on com­ple­tion of tax re­turns. These fees are gen­er­ally based on a per­cent­age of the re­fund due to the client.”

Van Dyk said the un­der­ly­ing prin­ci­ple was that this prac­tice might amount to a “per­verse in­cen­tive” on the part of a prac­ti­tioner to claim for items he would not nor­mally do in or­der to en­large his per­cent­age fee.

Chérie Carstens-Petersen, a mar­ket­ing and stake­holder co-or­di­na­tor at SAIT, said in her ex­pe­ri­ence alarms go off (when) a prac­ti­tioner charges the tax­payer a por­tion of the re­fund.

“If you only have a salary that is taxed cor­rectly by your em­ployer, you should not be re­ceiv­ing a big re­fund,” she said.

“If you do not have any qual­i­fy­ing de­duc­tions such as med­i­cal aid cred­its, pen­sion fund, re­tire­ment an­nu­ity or prov­i­dent fund con­tri­bu­tions, or a travel al­lowance against which you can claim kilo­me­tres trav­elled then the chances are slim that you will be re­ceiv­ing a re­fund.”

She said tax­pay­ers should ask the pre­parer how he/she got to a re­fund if they do not have any of the qual­i­fy­ing de­duc­tions.

It is im­por­tant to es­tab­lish whether you are deal­ing with a reg­is­tered tax prac­ti­tioner. Carstens-Petersen said peo­ple should ask to which pro­fes­sional body the per­son mak­ing the “re­fund prom­ises” be­long to.

“If your prac­ti­tioner is be­hav­ing badly and you know which pro­fes­sional body he is reg­is­tered with, you can fol­low the rel­e­vant body’s dis­ci­plinary process which in­volves a sworn af­fi­davit and sup­port­ing ev­i­dence.”

Tax sea­son closes on Oc­to­ber 31 for non-pro­vi­sional tax­pay­ers and for those pro­vi­sional tax­pay­ers who opt to file at a branch.

All Sars branches will also be open from 8am un­til 1pm on Satur­days to al­low tax­pay­ers to make use of selfhelp kiosks to elec­tron­i­cally file their per­sonal in­come tax re­turns.

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