We currently have a trust who submitted a IT12TR for the tax year end 2011. The Assessment was issued on 2012/01/31. SARS incorrectly assessed the trust return on a taxable profit instead of a loss. This has caused a tax liability on 2011.
Important:
This answer is based on tax law for the year ending 28 February 2011.
Answer:
The request for a reduced assessment under section 93(1)(e) of the Tax Administration Act applies to assessments older than 3 years. Section 93(1)(e) requires of the taxpayer to satisfy a senior SARS official that the relevant assessment was based on—
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the failure to submit a return or submission of an incorrect return by a third party under section 26 or by an employer under a tax Act;
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a processing error by SARS; or
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a return fraudulently submitted by a person not authorised by the taxpayer.
SARS indicated, in the Objects of the amendment to section 93, that this may well be an example of a procession error by SARS.