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The Late Objections and Exceptional Circumstances

TAX LAW IN ACTION – LATE OBJECTIONS AND EXCEPTIONAL CIRCUMSTANCES

An individual taxpayer recently realised that he should have been assessed to a refund in respect of his 2017 year of assessment.  This is associated with the so-called “183/60 day exemption”. Instead of a refund, SARS assessed the taxpayer to a liability.  The trouble was that the assessment against which an objection lied was more than two years old (but not more than three years old).

On the facts of the case there appeared to be no exceptional circumstances that could justify the delay in submitting the objection.  Therefore an objection would almost certainly be rejected.

LATE OBJECTIONS AND EXCEPTIONAL CIRCUMSTANCES

After closer scrutiny of the assessments and returns, it came to light that the exemption claim was simply disallowed in the original assessment.  This was despite it being correctly claimed on the return. It was also clear that there was no audit or verification conducted. Clearly then, the original assessment raised by SARS was not fully based on a return/information submitted by the taxpayer. As such, SARS was obliged, in terms of section 96, to include the grounds for the assessment in the original assessment. SARS failed to do so. Had SARS complied with their obligations under the TAA, the taxpayer (being a layperson) would have been aware of the disallowance of the exemption claim.  He would have been in a position to lodge an objection on time.

In this case, it was successfully argued that SARS’ non-compliance with the provisions of the relevant legislation constituted exceptional circumstances.  The late objection was condoned by SARS.

Our speciality practice area is tax dispute resolution. Our team is headed by Nico Theron (Chartered Tax Advisor (SA)), author of Lexis Nexis’ Practical Guide to Handling Tax Disputes, Chairman of the South African Institute of Tax Professionals Tax Administration Work Group, guest lecturer on tax dispute resolution at post grad level at UP and WITS, head lecturer on The Tax Faculty’s dispute resolution course and founder of Unicus Tax Academy. If you’re looking for expert tax consultants in South Africa, get in touch.

Unicus Tax Specialists SA, has, at the time of writing, always been able to secure a satisfactory outcome for our clients in their disputes with SARS, thereby saving our clients hundreds of millions of rands in taxes, penalties and interest.

Every effort was made to ensure accurate reflection of the law and the tax principles discussed in our articles or as set out on our website at the time of publishing on the website. Tax law develops all the time and it is therefore recommended that views expressed in the past be vented by users for current applicability and accuracy.  Comments made and views expressed in our articles and on our website does not constitute advice to any person or company. Unicus Tax Specialists SA will not be liable for any loss or damage of whatever nature or form caused due to reliance on this article.

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