In determining the penalty, SARS did not take into account any expenses. What recourse does the client have and what is the next step after the failed objection?
Important:
This answer is based on tax law for the tax year ending 28 February 2020.
Answer:
We don’t know what SARS means when they say that “that the dispute has been rejected.” You will have to get the actual letter that SARS send – you can’t rely on the telephonic response. Time is of the essence. The letter would have been delivered to the address specified by the taxpayer in the objection or the email address of the client.
Where SARS, as they may, regarded the objection as invalid, they must then notify the taxpayer accordingly and state the ground for invalidity in the notice within 30 days of delivery of the invalid objection. The taxpayer then must, and within 20 days of delivery of the notice submit a new objection without having to apply to SARS for an extension under section 104(4).
If the objection was accepted as valid, SARS probably disallowed the objection. If so, SARS must notify the taxpayer of the allowance or disallowance of the objection and the basis of the disallowance. The next step for the taxpayer would then be to deliver a notice of appeal.