Tax experts are warning people to avoid ghost tax practitioners who promise large refunds from SARS (South African Revenue Service). There has been a rise in cases where taxpayers discover that these fraudulent tax practitioners have taken their money and disappeared without submitting their tax returns.
Beware of Ghost Tax Practitioners
Often, taxpayers only realize something is wrong when they receive large tax assessments and penalties from SARS. Some “ghost” tax preparers promise refunds, charge a fee, and then vanish. If SARS audits the taxpayer’s case, they may demand the money back, and the taxpayer could also face penalties.
The Risks of Poor Tax Planning
In some cases, taxpayers think their tax affairs are being handled properly, only to later find out they’ve broken tax laws, have unpaid penalties, or have overpaid due to poor planning. These issues often come to light when someone requests a tax clearance certificate or when SARS takes money directly from the taxpayer’s bank account due to unpaid taxes.
SARS Tightens Regulations on Tax Practitioners
SARS recently issued guidance on the legal requirements for registering as a tax practitioner and when such a registration might be revoked, likely to protect taxpayers. However, tax compliance is ultimately the responsibility of the taxpayer, and claiming that you thought your tax practitioner handled everything is not a valid defense.
Ensure Your Tax Practitioner is Compliant
SARS is closely monitoring tax practitioners to ensure they are up to date with their own taxes. Some practitioners have been found with overdue taxes, which likely indicates poor advice to their clients, who may also be non-compliant.
Verify Your Tax Practitioner’s Credentials
Anyone completing tax returns or giving tax advice for a fee must be registered with SARS and a regulatory body like the SA Institute of Taxation or the SA Institute of Chartered Accountants. Illegal tax practices can lead to up to two years in prison. Taxpayers should verify the qualifications and registration status of a tax practitioner before hiring them to ensure their tax affairs are handled correctly.
Important Deadlines for 2024 Tax Submissions
SARS completed automatic assessments between July 1 and July 14, 2024. Non-provisional taxpayers have until October 21, 2024, to submit their returns, while provisional taxpayers and trusts have until January 20, 2025.
Ghost tax practitioners are fraudulent individuals who claim to be legitimate tax professionals but often disappear after taking money from taxpayers, without submitting tax returns or properly handling tax matters.
Frequently Asked Questions
1. What are ghost tax practitioners?
Ghost tax practitioners are fraudulent individuals who claim to be legitimate tax professionals but often disappear after taking money from taxpayers, without submitting tax returns or properly handling tax matters.
2. How can I avoid tax fraud in South Africa?
To avoid tax fraud, ensure that you hire a registered tax practitioner who is recognized by SARS and associated with a professional body such as the SA Institute of Taxation or the SA Institute of Chartered Accountants.
3. What should I do if my tax practitioner disappears?
If your tax practitioner disappears, immediately contact SARS to check the status of your tax returns and seek advice on how to proceed. You may also need to report the fraud to the relevant authorities.
4. What are the penalties for unfiled tax returns with SARS?
SARS may impose significant penalties and interest for unfiled tax returns. In severe cases, SARS may also take legal action to recover unpaid taxes directly from your bank account.
5. How can I verify if a tax practitioner is registered with SARS?
You can verify if a tax practitioner is registered with SARS by checking their credentials on the SARS website or by contacting the SA Institute of Taxation or the SA Institute of Chartered Accountants.
6. What are the legal requirements for tax practitioners in South Africa?
In South Africa, tax practitioners must be registered with SARS and a recognized regulatory body. They must also comply with the latest SARS guidelines and maintain their own tax compliance to offer valid tax advice and services.
7. When are the SARS tax return deadlines for 2024?
For 2024, non-provisional taxpayers have until October 21, 2024, to submit their tax returns, while provisional taxpayers and trusts have until January 20, 2025.
8. What happens if I discover unpaid taxes or penalties due to my tax practitioner’s negligence?
If you discover unpaid taxes or penalties due to your tax practitioner’s negligence, you may be held responsible by SARS. It’s important to act quickly to address the situation and seek proper legal advice if necessary.
Resource: https://www.news24.com/citypress/news/ghost-tax-consultants-fleecing-clients-and-leaving-them-in-trouble-with-sars-20240811
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