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Applying for a tax debt compromise? SARS will ask these six parties to see if they can recover your tax debt first

by , 25 September 2014
If you think applying for a tax debt compromise only involves you and SARS, you're wrong.
When SARS reviews your application, it will involve other parties to see if they can be held liable for your tax debt. SARS calls these parties, responsible third parties.

A responsible third party is anyone who has financial responsibility towards your company. SARS will assess responsible third parties and will ask for more information about them if it chooses to investigate this further.

Keep reading to discover six types of people SARS might investigate when it comes to your tax debt.


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Tax debt compromise 101: Here are the six types of people SARS might investigate to see if they can recover your tax debt
 

SARS might investigate:
 
  1. Shareholder and members if the taxpayer is a company or close corporation;
 
  1. Directors of a company;
 
  1. A designated representative taxpayer (the person in charge of submitting returns, making payments etc. on your behalf);
 
  1. Anyone who owes you money. This includes your customers, staff who owe you loans, shareholders who owe the company money, etc.;
 
  1. Spouses married in community of property (and in some cases, married out of community of property as well); and
 
  1. Your direct family members. SARS might call your parents, brothers, sisters, aunts or uncles and ask if they can't 'help you out'.
 
Applying for a tax compromise has far reaching consequences even for people close to you. So let them know that SARS might look into them to see if they can pay your tax debt.

For more information on a tax debt compromise, checkout the Practical Tax Loose Leaf Service. And if you have questions, ask our experts at the Accounting & Tax Club.



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