Before commencing with an objection, a taxpayer is entitled to request SARS to provide proper reasons for the assessment. Reasons allows the taxpayer to understand the assessment and more easily formulate an objection.
When engaging in disputes with the taxman, there are many rules you need to be aware of and correct steps to take in order to engage SARS effectively.
An objection does not automatically suspend the taxpayer’s obligation to pay tax. A suspension of payment is needed and should be filed before or simultaneously with the objection.
The objection form may be too brief to properly explain why the taxpayer is contesting the assessment. A cover letter is a brief submission of the taxpayer’s claim, setting out their grounds of objection, the amount contested, and legal argument.
The taxpayer bears the burden of proving any amount or transaction is exempt or otherwise not taxable. SARS requires documentary evidence with an objection to prove any such claim.
Failing to accurately follow dispute time frames will result in a failed objection. Taxpayers should take note:
The stakes are high when you submit an objection against an assessment, because any items you omit at this point will be considered bygones.
We are often approached by taxpayers only once their dispute with SARS has gone awry; often when it has progressed beyond the objection stage. It soon becomes evident that the taxpayer or their representative failed to address certain pertinent aspects in the objection, which makes it very difficult to salvage what may have appeared to be a very simple matter.
Vague and ill-informed objections can result in very serious ramifications for the taxpayer, even where they may have been assessed incorrectly.
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