Dodging the Bogus Tax Practitioner’s bullet
23 August 2016
By Siya Madikazi, Tax Trainee at BDO SA
Over the past years there has been an increase in taxpayers being scammed by bogus tax practitioners. This article focuses on certain aspects that a taxpayer should consider to ensure a tax practitioner is legitimate.
To be compliant with the Tax Administration Act (TAA), a tax practitioner has to be registered with SARS as a tax practitioner and must fall under a recognised controlling body such as the South African Institute of Chartered Accountants (SAICA), South African Institute of Tax Practitioners (SAIT) and the Chartered Institute of Management Accountants (CIMA). In most cases tax practitioners provide advice on the application of a Tax Act or assist in the completion of income tax returns. The TAA relies on the controlling bodies to take disciplinary action against tax practitioners who do not comply with the codes of ethics and conduct required of their members. A senior SARS official may also lodge a complaint with the controlling body in certain predetermined situations. Despite the duties and responsibilities of a tax practitioner, a taxpayer still has the responsibility for the accuracy of the tax return. It is therefore important for a taxpayer to ensure that the tax practitioner is legitimate, knowledgeable and diligent. The following list can assist a taxpayer in verifying the legitimacy of a tax practitioner:
- Request the tax practitioner to produce his or her SARS practice number and controlling body membership number as proof of registration;
- LVerify if the tax practitioner is registered through the controlling body. Controlling bodies, such as SAICA, have an online verification system on their website. SAICA’s verification system can be accessed at https://www.saica.co.za/Members/VerifyaMember/tabid/1017/language/en-US/Default.aspx;
- Enquire about the tax practitioner’s qualifications;
- Enquire about the tax practitioner’s background and experience in tax, for example, whether the tax practitioner has dealt with similar cases before and how they resolved the cases; and
- Avoid appointing a tax practitioner that does not have a registered office and landline.
The following should be requested in the initial meeting with a tax practitioner:
- Information that the tax practitioner requires and the relevance of the information;
- How the tax practitioner’s fees will be calculated. Fees calculated based on expected refunds may be indicative of self-interest which could pose a potential risk; and
- How the tax practitioner intends to manage your case.
Taxpayers should not hesitate to ask questions when something is unclear. Tax practitioners may be reported to the nearest SARS branch office or on the SARS website, by completing and submitting an “Rtax practitioner001 Reporting a tax Practitioner” form. SARS will consider the matter and take appropriate action. So-called “tax practitioners” who are bogus and not registered can still be reported to SARS and SARS will advise on how the matter should be taken further. Taxpayers should ensure that they keep copies of all documents provided to the tax practitioner. Taxpayers are required to retain records for at least five years, which can also be used as evidence in case illegitimate “tax practitioners”.
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