SARS Audit Delays and Appeal Challenges

SARS Audit Delays and Appeal Challenges

• 26 November 2024
• Tax Administration
• Marita Jordaan

1. Background

The taxpayer submitted their 2023 ITR12 return. SARS selected the return for verification and requested supporting documents. However, the required documents were not submitted within the specified timeframe, leading SARS to issue an estimated additional assessment on the date of the expiry date of submission of the requested documents . 

In an effort to address the issue, the taxpayer filed a complaint with SARS because eFiling did not permit the submission of a Notice of Objection (NOO) against the estimated additional assessment. 

2. Question

What is the appropriate process for a taxpayer to follow if they disagree with an estimated additional assessment issued by SARS and wish to dispute it?

3. Applicable Law 

TAA 8 of 2011 Section 95

4. Application of the Law to the Facts

Section 95 of the Tax Administration Act No. 28 of 2011 (“the TAA”) empowers SARS to issue an estimated assessment if a taxpayer fails to submit a return, submits a return with incorrect or inadequate information, provides incorrect or insufficient relevant material requested by SARS, or does not respond to a request for relevant material (including information or documentation specified in a verification request) after multiple requests from SARS. 

If SARS issues an estimated assessment to a taxpayer, the assessment will be issued as a notice of assessment. The taxpayer will not be permitted to request a correction for the tax period covered by the estimated assessment. If the taxpayer disagrees with the assessment, they have 40 business days from the date of the estimated assessment to submit the correct relevant material to SARS. An extension of the 40-business-day period may be requested from SARS if reasonable grounds for the extension are provided. If the estimated assessment results in an amount payable to SARS, the taxpayer may submit a suspension of payment request under section 164 of the Tax Administration Act. However, the taxpayer cannot object to an estimated assessment through the normal dispute resolution process. Instead, the correct procedure is to submit the complete and accurate relevant material requested by SARS within 40 business days. If SARS does not issue a reduced assessment (i.e., correct the assessment) after receiving the relevant material, the taxpayer may then object to the estimated assessment by submitting a NOO to SARS.

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