Case Studies

*These are for illustrative purpose only and are fictitious.
Any references to actual events are purely coincidental.

Ensure SARS follow due process

Mr Cassim’s owns a shoe retail shop in the commercial centre of Durban. He pays his taxes and submits his tax returns regularly and on time. He has a very good accounting firm taking care of his accounting and tax affairs.

Following the submission of his latest returns by his accountant via e-filing, SARS requested Mr Cassim’s accountant to submit some supporting documents to his tax returns. This is nothing unusual. SARS often calls for supporting documentation to verify the information contained in a filed tax return.

But then SARS called Mr Cassim directly for an appointment to further their investigation.

Mr Cassim is a GreatSoft TaxAssist policyholder and calls GreatSoft Financial Services before the meeting for some advice. This was the correct thing to do, as this meeting would clearly have infringed on Mr Cassim’s rights as a taxpayer. He might have inadvertently incriminated himself, as Mr Cassim is not a tax expert.

GreatSoft Financial Services notified SARS that our tax attorney service provider will be acting on behalf of Mr Cassim. We were able to successfully represent Mr Cassim in this matter, ensuring that SARS followed due process as required by the Tax Administrations Act, and that Mr Cassim’s rights were equally protected.

Accountants’ Time is Money – Ensuring your fee is covered

Botha and Partners is an accounting firm in Mpumulanga. Johan Botha recommends that all his clients buy a GreatSoft TaxAssist Insurance policy from GreatSoft Financial Services.

When we asked why, they had the following story to tell:

One of his long-standing clients was randomly selected for audit by SARS. His client owns a medium sized business, but times are tough and there is not a lot of spare cash in the business. Johan knows this all too well – he is her accountant, after all.

To resolve the audit with SARS required four days of Johan’s time, as the taxpayer’s accountant. But here’s the issue; Johan was not able charge his client for his time spent defending the audit because he knew his client had cash flow issues.

So he made a decision, in the best interest of his client, to do the work for free, rather than to leave his client to her own devices.

The problem this is that the accounts’ time is money. If accountants don’t charge for the work they do, they will soon not have a business.

With GreatSoft TaxAssist policy, Johan was able to send his invoice to GreatSoft Financial Services for payment and focus on conducting a proper tax audit defence, on behalf of his client.

SARS audits Trustees

Our client is a Trust, which holds the interests of a farm in the Western Cape.

Unbeknownst to the rest of the Trustees, one Trustee is audited by SARS and found wanting. SARS then proceeded to also conduct an audit on the Trust.

During the audit, SARS disallowed all the VAT inputs and underlying expenses in the farm for the past 10 years. The reason for this decision was not made clear.

This translated into an outstanding tax bill to SARS of just short of R10 million.

GreatSoft Financial Services stepped in to defend the case. After the cost of R150 000 in professional defence fees – SARS conceded and overturned their original decision.

The matter was settled on a PAYE short payment of R2 000, which occurred due to an administrative error on the part of the Trust. The Trust then paid this outstanding R2 000 to SARS, together with a small amount in penalties and interest.

The cost of defending the client’s case to SARS far exceeded the cost of the actual administrative error of R2 000 plus penalties and interest. This is why taxpayers must protect themselves with a GreatSoft TaxAssist policy.

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