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What must you do after SARS has sent you notice of an audit?

by , 11 February 2014
As you know SARS has the power to audit your business. What you may not know is that SARS isn't above the law. Continue reading to find out how to safeguard your rights after SARS has sent you notice of an audit.

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How to make yourself invisible to SARS
 
Key to reducing how much tax you pay is staying off SARS' radar.
But SARS plans to double the 72,926 audits it managed this year. It's added 100s of new tax collectors and auditors to its payroll and each one has his own collection targets to meet. This means two things:
  1. Your chances of an audit this year has just doubled, and
  2. So has your chance of paying more tax.
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It's important that you know your rights regarding audits.

Do the following when you receive notice of the audit:

According to the Practical Tax Loose Leaf Service, when you receive notice of the audit, you must send SARS a letter asking for copies of the SARS identification cards of the auditor and the team leader or line manager.

If SARS doesn't produce these, you can assume that the person mentioned in the letter (notice) isn't a SARS official. This is according to Section 8(3) of the Tax Administration Act (TAA).

Then once SARS responds by giving you the copies you've requests, send another letter a asking SARS to explain the following to you:

  • Under what Act and what provisions must you provide the information requested?
  • What the purpose of the audit is?
  • Ask for a copy of the risk analysis report. The Promotion of Access to Information Act the (PAIA) gives you the right to request access to records of a public body if the record contains personal information about yourself;
  • Request a copy of the audit file.

What if SARS rejects your request for the risk analysis report or a copy of the audit file?

In this case, lodge an internal appeal in terms of Section 74 of the PAIA.

Also keep in mind that you have the right to withhold information from SARS until the process of internal appeal is complete.

'Everyone has the right to administrative action that is lawful, reasonable and procedurally fair. This includes any action or decision taken by SARS,' says the Loose Leaf Service.

Knowing what you must do when you receive notice of the audit will help ensure you safeguard your rights and ensure SARS acts lawfully.

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