Beware of anyone who “guarantees” you a tax refund on submission of your tax return.
This week, the South African Revenue Service (SARS) warned taxpayers of an increase in fraud involving “tax consultants” or intermediaries who promise clients substantial refunds in return for a 50-percent cut of the refund.
In a media release, SARS says that “anyone who guarantees a taxpayer a tax refund may be misleading them and should be avoided”. These “tax advisers” submit fraudulent returns to SARS on your behalf.
The activities of suspected syndicates are prevalent at this time as the deadline of November 22 approaches for the close of the 2013 tax filing season, according to the SARS media release.
Last month, SARS and the police conducted raids in Mpumalanga that led to the arrest of 28 people. The people who were arrested had submitted fraudulent income tax returns on behalf of at least 200 individuals, on the understanding that they would keep a percentage of the fraudulent refund.
“It is possible that the arrested individuals were tax practitioners, or were masquerading as such. The total amount of fraudulent claims in these cases is just over R7 million,” SARS says.
Chris van Dyk, legal and compliance officer at the South African Institute of Tax Practitioners, says that, since the regulation of tax practitioners became effective on July 1, registered tax practitioners have not been permitted to charge percentage-based fees based on the amount of a refund.
SARS says the only way a refund can be “guaranteed” upfront is if fraudulent information is submitted in an income tax return. “This places the taxpayer at serious risk of being arrested for fraud, because taxpayers are ultimately responsible for tax returns submitted in their name, even if by third parties.”
If you’re unsure about how to submit your tax return, SARS can assist you as follows:
* If you’re registered for eFiling, you can use the Help-You-eFile function on the eFiling website. This puts you in direct contact with a SARS call centre agent while you complete your tax return online. With your permission, the agent can access your eFiling browsing session at the same time as you are online and see exactly what you see on your computer screen.
* If you cannot use eFiling or you don’t feel confident to do so, you can visit a SARS branch – and bring all the relevant documents with you – and a SARS official will submit your tax return electronically on your behalf free of charge.