SARS double billing

[Johnatan56]

Hi everyone,

A family member of mine did not submit tax returns ~5 years ago, for which SARS has reminded him just recently. He realizes his mistake and SARS took the money out of his account.

The problem is that they double billed him, so now his account is in debt and his salary this month has been taken from him to cover the costs.
They have realized their mistake, but my question is how long until they pay back the money they owe if anyone else has experienced this?
Is there anything that can be done about it?

Thanks
(I am pretty clueless on taxes, still a student )

 

[Mbuzi]

Hi everyone,

A family member of mine did not submit tax returns ~5 years ago, for which SARS has reminded him just recently. He realizes his mistake and SARS took the money out of his account.

The problem is that they double billed him, so now his account is in debt and his salary this month has been taken from him to cover the costs.
They have realized their mistake, but my question is how long until they pay back the money they owe if anyone else has experienced this?
Is there anything that can be done about it?

Thanks
(I am pretty clueless on taxes, still a student )

Not submitting Income Tax returns attracts penalties in the form of Administrative Penalties. SARS can charge a minimum of R250p.m. per outstanding return thus making your cousin owe about R75000 minimum. What SARS then do is to apply for a garnish order not exceeding 25% of taxpayer's salary, worst case, they go to a bank and apply to take everything in the bank at date of application not exceeding what taxpayer owes SARS.

If SARS really double billed your relative, it can take anything between 1-21 working days to pay back the money.

NB: If SARS double billed but your family member still owes them, chances of him getting money back are zero esp with the revenue drive in full swing.

If unclear just PM in the morning.

 

[AchmatK]

The administrative penalties can be a pain but SARS is more than willing to waive these. I had over R30k in admin penalties waived and refund of R20k paid for a client a few months ago.



I know SARS has access to Bank accounts but have not had one incident of SARS actually doing a direct debit from a taxpayers account. They do issue employers with an IT88 in order for the employer to deduct the money from any salary. Similar to a garnishee order but without the need for a court order

 

[Johnatan56]

Not submitting Income Tax returns attracts penalties in the form of Administrative Penalties. SARS can charge a minimum of R250p.m. per outstanding return thus making your cousin owe about R75000 minimum. What SARS then do is to apply for a garnish order not exceeding 25% of taxpayer's salary, worst case, they go to a bank and apply to take everything in the bank at date of application not exceeding what taxpayer owes SARS.

If SARS really double billed your relative, it can take anything between 1-21 working days to pay back the money.

NB: If SARS double billed but your family member still owes them, chances of him getting money back are zero esp with the revenue drive in full swing.

If unclear just PM in the morning.

Thanks, thought the charges were R1k p.m due to him earning ~800k p.a.? He got charged ~120k, of which R60k is the right amount.
Could you explain further on the garnish order?

EDIT: He owes nothing after these charges.

EDIT2:

The administrative penalties can be a pain but SARS is more than willing to waive these. I had over R30k in admin penalties waived and refund of R20k paid for a client a few months ago.

I know SARS has access to Bank accounts but have not had one incident of SARS actually doing a direct debit from a taxpayers account. They do issue employers with an IT88 in order for the employer to deduct the money from any salary. Similar to a garnishee order but without the need for a court order

It is his second offense with SARS, he did something similar when he got to the country ~20 years ago, so don't think they will waive. Still told him to apply for it though, but it might be a bit late. They did do a direct Debit Order, they had the wrong phone number for him (an old one that we have updated multiple times to his cellphone number, yet SARS for some reason keeps defaulting to the old one) so he never replied to their communication. Made sure he sorted out the phone number issue today, was next to him during his conversation.

Could you explain an IT88 order please?
Thanks for all the help guys.

 

[Stefanmuller]

Thanks, thought the charges were R1k p.m due to him earning ~800k p.a.? He got charged ~120k, of which R60k is the right amount.
Could you explain further on the garnish order?

EDIT: He owes nothing after these charges.

For that amount of money I would advise the family member to consult a tax practitioner or accountant to deal with SARS on his behalf. You most likely dont have all the info as I find it hard to believe that he owes so much only on outstanding admin penalties without him knowing. These days SARS phones taxpayers directly for current year returns for outstanding info such as a certificate, even though it was submitted via a tax practitioner.

 

[Mbuzi]

The administrative penalties can be a pain but SARS is more than willing to waive these. I had over R30k in admin penalties waived and refund of R20k paid for a client a few months ago.

Not all the time esp for those who have a few outstanding returns and owe a lot in admin penalties. What happens in most cases where guys owed more than R100K in admin fees, SARS will just disallow the objection (ADR1) and go after the taxpayer either via a garnishee order or direct debit at the bank, pay now argue later system. Only way they can waive this is when you have not more than 2 returns outstanding and/or have valid reasons for not filing your returns.

Third Party Appointments are now common at SARS, esp where taxpayers are directors, not salaried individuals. SARS just goes to the bank.

 

[Mbuzi]

For that amount of money I would advise the family member to consult a tax practitioner or accountant to deal with SARS on his behalf. You most likely dont have all the info as I find it hard to believe that he owes so much only on outstanding admin penalties without him knowing. These days SARS phones taxpayers directly for current year returns for outstanding info such as a certificate, even though it was submitted via a tax practitioner.

Possible, remember if you last filed long time ago and your details are not updated with SARS, there's no way you'd know about these penalties. Guys who last submitted in 2006 owe between R170 000 to R200 000 in penalties and they'll only find out when SARS knocks at their place of employment or residence with letters of final demand. I have first hand experience regarding this

 

[Johnatan56]

For that amount of money I would advise the family member to consult a tax practitioner or accountant to deal with SARS on his behalf. You most likely dont have all the info as I find it hard to believe that he owes so much only on outstanding admin penalties without him knowing. These days SARS phones taxpayers directly for current year returns for outstanding info such as a certificate, even though it was submitted via a tax practitioner.

Yeah, we've set him up with an accountant, the accountant is going to start working on it on Monday.
I thought he already had an accountant, but seems only his wife had one due to her being a doctor -> private business.

EDIT:

Possible, remember if you last filed long time ago and your details are not updated with SARS, there's no way you'd know about these penalties. Guys who last submitted in 2006 owe between R170 000 to R200 000 in penalties and they'll only find out when SARS knocks at their place of employment or residence with letters of final demand. I have first hand experience regarding this

That's what happened to him.

 

[AchmatK]

An IT88 is where SARS appoints a third party to deduct an amount from someone in their employ prior to any salary paid to them. SARS will specify an amount to be deducted but the employer can request this to be reduced and paid over a number of months. The employer can also indicate that the employee is not by the means for any deduction or that the employee no longer works for the company.

They normally find out who the employee is employed with from the info on the IRP5/EMP501 that every employer has to submit to SARS twice a year.

This is mainly issued via the SARS easyfile software.

 

[Johnatan56]

An IT88 is where SARS appoints a third party to deduct an amount from someone in their employ prior to any salary paid to them. SARS will specify an amount to be deducted but the employer can request this to be reduced and paid over a number of months. The employer can also indicate that the employee is not by the means for any deduction or that the employee no longer works for the company.

They normally find out who the employee is employed with from the info on the IRP5/EMP501 that every employer has to submit to SARS twice a year.

This is mainly issued via the SARS easyfile software.

Thanks a lot for the info guys.
Really not looking forward to this in 2 years after I finish uni