In a court case, the Commissioner's officers arrived unannounced at the taxpayer's office, after which they requested documents.
The taxpayer then provided it to them.
But he was ignorant of his own rights when doing this!
You see, in court, the officers produced a written authority from the Commissioner stating that he had appointed each of them to the audit.
But some of the necessary details were missing from the letter of authority. Details excluded were that the audit will be conducted in line with the Income Tax Act,
as well as the name of the taxpayer.
The Court then decided that, despite the taxpayer's ignorance, the Commissioner had acted in opposition to the law, and so it ordered that the SARS return the seized documents to the taxpayer.
So what can you learn from this case?
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With penalties as high as 200%, you can't afford to stay in the dark about the auditing process. You need to know your rights, your responsibilities and obligations, and you need to know them before it's too late…
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From this case, you can learn that, unless SARS can produce proper notification and authorisation, which is in line with the law, you may exercise your rights by completely refusing to comply with them.
So keep this case in mind and remember to always check that SARS first produces correct notifications before even considering to comply with them.
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