We completed my clients tax returns. We first did 2018, there was no audit. The money was paid out. Then we went on and caught up on the other outstanding years. Also there was no another statement of account and saw there is a payment reversal and all o
Important:
This answer is based on tax law year ending 28 February 2018.
Answer:
The position is that SARS, under section 190(2) of the Tax Administration Act, is entitled to withhold a refund. We quote from the section:
“SARS need not authorise a refund as referred to in subsection (1) until such time that a verification, inspection or audit of the refund in accordance with Chapter 5 has been finalised.”
But, as Judge Sutherland explained, “… the power to refuse to pay a refund is limited to an examination of the contemplated refund itself … an examination of income tax affairs of the taxpayer cannot be relevant as a brake on the invocation of section 190(1) entitling the taxpayer to the refunds.”
We are not sure what the ‘reversing of refunds’ imply. SARS can only change the refund amount by issuing an assessment.