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Warning! Just because your tax debt compromise was successful, doesn't mean you're off the hook!

by , 19 September 2014
Congratulations! Your tax debt compromise was successful.

After your application and endless meetings where SARS put your financial information under scrutiny to see how much it can realistically recover, you finally reached an agreement.

SARS penalties, audits and relentless phone calls from SARS' collections department will now be a thing of the past, you're now off the hook.

We hate to bust your bubble, but just because your tax debt compromise was successful, doesn't mean you're off the hook!

Let me explain...


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A successful tax debt compromise doesn't mean you're off the hook


It's true.

'SARS can, and will, bring back a compromised tax debt if you contravene any tax law or obligation in future,' says the Practical Tax Loose Leaf Service.

This means, even if you forget to submit one return, SARS is within its rights to withdraw the compromise and put the entire tax debt back on your account for immediate collection.

You'll be back to square one, which means:
 
  • Your tax debt will be due in full; and
  • You'll face SARS audits.
 
If you're thinking, 'there's no limit to the number of compromises I can apply for, it's no train smash, I'll just reapply', we have news for you.

Yes, you're right, if SARS withdraws a previous tax compromise because you broke the rules and puts the tax debt back on your account, you can go through the whole compromise process again.

The bad news is SARS might not be so understanding the second time around! SARS doesn't like non-compliant taxpayers and it won't take kindly to you violating the terms and applying again.

Here's the bottom line: A successful tax debt compromise doesn't mean you're off the hook. The onus is on you to ensure you're always compliant, so stick to the terms of the tax compromise agreement.

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