Albertus Marais, director of AJM Tax, said his practice had seen an increase in such cases in recent months. The taxpayers only realised something was wrong when they received huge tax assessments and penalties from Sars, Marais said.
Keith Engel, CEO of the SA Institute of Taxation (SAIT), also warned taxpayers against those who guaranteed them huge Sars refunds.
Engel said:
Many of what we call ‘ghost’ tax preparers promise refunds, charge a fee and then disappear. If Sars then audits the taxpayers’ cases, they demand that the money be repaid. The taxpayer can also incur penalties
According to Lambert Roberts of Tax Consulting SA, there were taxpayers who assumed their tax affairs were being handled by reliable practitioners, only to later discover they may have violated tax law, have outstanding penalties or have overpaid due to poor tax planning.
“The problems often come to light when someone requests a tax clearance certificate, or when the tax collector directly recovers money from the taxpayer’s bank account due to outstanding tax debt,” Roberts said.
A recent interpretation note by Sars on the legal requirements to register as a tax practitioner and in which cases such a registration would be revoked was probably aimed at protecting taxpayers, Marais said.
He added that tax compliance was ultimately every taxpayer’s responsibility and it “is not a defence to say you thought your tax practitioner would ensure everything was in order with the taxman”.
Sars warned at the start of this tax season that it was closely monitoring tax practitioners to ensure their taxes are up to date.
The interpretation note on a specific section of tax legislation regarding the registration of tax practitioners followed after Sars commissioner Edward Kieswetter said in April this year that the tax collector had identified more than 50 practitioners whose taxes are not up to date.
This partly indicated how they advised their clients and meant those clients were probably also guilty of non-compliance. Engel said people who complete tax returns on behalf of taxpayers or give advice for a fee must be registered with Sars and a regulatory industry body, such as SAIT or the SA Institute of Chartered Accountants.
Those who operated illegal tax practices could be sentenced to up to two years in prison. Taxpayers should proactively verify the qualifications and registration status before appointing a tax practitioner.
This would ensure your tax affairs were in the hands of a competent practitioner who was up to date with the country’s tax laws and regulations and maintained a high standard, said Roberts.
Taxpayers could confirm the legality of tax practitioners by obtaining proof of registration from an institution such as SAIT. Although this was not illegal, it needed to be better regulated to ensure the National Treasury got what it was due to it.
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