In these troubled economic times, some are seeking to earn extra earnings as tax return preparers despite their lack of training and experience, says the SA Institute of Tax Professionals. Others are seeking to use their so-called expertise to defraud SARS and / or you as the client.
When seeking tax advice and assistance with the preparation of your tax return, the Institute strongly suggests that care be taken to ensure that the preparer is of high quality and of good repute. Provided below are typical signs of trouble:
– Questionable preparers are quick to promise refunds or compile returns without looking at underlying documentation. Refund claims and deductions must be justified. Don’t get caught-out when SARS conducts an audit for you alone will bear the price.
– Questionable preparers set fees that are wholly or partially based on percentages of promised refunds. This arrangement often creates the wrong incentive to inflate or falsify refunds, which will again fall squarely on you.
– Questionable preparers often do not sign returns because they lack legal status. Preparers must be registered with SARS as tax practitioners via a recognized controlling body (see section 240 of the Tax Administration Act). While we at SAIT are the only recognized controlling body dedicated solely to tax, we note that other professional bodies exist to choose from. A tax preparer’s signature is the key sign that they are willing to stand by their return. You can verify practitioner status by:
First obtaining their practitioner registration number; and
Second by verifying their practitioner registration on the SARS website: https://secure.sarsefiling.co.za/TaxPractitionerQuery.aspx or with their stated professional body.
SAIT verification can be found on the website under the icon “Verify/Find a tax practitioner” http://sait.site-ym.com/search/
– Questionable preparers lack experience. To be a practitioner at SAIT, members must have a minimum of three years of tax experience if they have a university degree. Members without a university degree must generally have 5 years of tax experience and provide SAIT with a logbook of practical tax experience. Other professional bodies have their own requirements that must similarly meet SARS standards of expertise.
– Questionable preparers may ask for cash to resolve a dispute with one of their “friends” inside SARS. This offer may sound tempting. However, this offer could just as easily be part of a scam to falsely take money from you. Even if the preparer does have someone on the inside, these insiders are known to have placed your tax debt on “suspension”. This suspension provides a false delay and can be lifted at any time. In short, don’t cheat the system – the cheaters will more often cheat you or leave you with SARS criminal penalties.
That said, there are many good tax practitioners in South Africa that can help you. Fees for Individual (IT12) returns are often very reasonable (typically from R1 200 to R6 000) depending on the complexity of the return. These rates are a very small price for a good night’s sleep.