In a country where the tax authority, SARS, holds the power to issue third-party appointments, non-compliant taxpayers risk losing more than just sleep. While most taxpayers dutifully comply with their tax obligations, there are numerous instances where others find themselves in conflict with the revenue collector. Occurrences of detrimental third-party appointments, where SARS seizes assets from non-compliant taxpayers are plentiful. In some instances, these cases escalate to legal battles fought in the High Court of South Africa.

But fear not! The attachment of emptying of your bank account is not the final battle. It is but one victory in the greater war on non-compliance. If SARS does not follow the correct collection procedure, as outlined in the Tax Administration Act, 28 of 2011, South African taxpayers and their trusted advisors, are fully armed to reclaim their lost fortunes.

Gain A Tactical Advantage: Understanding Third Party Appointments

While SARS undoubtedly holds the high ground, both morally and strategically, in the ongoing war against non-compliance, they are not unbeatable, especially when correct collection processes were not followed.  

To tactically combat SARS’ expert generals, taxpayers need to understand that a third-party appointment allows SARS to retrieve money directly from financial institutions and other third parties that have control or possession of your funds. While a powerful weapon in SARS’ arsenal, it is crucial that the correct procedures are followed to ensure lawful and fair processes.

SARS, like any war combatant, must adhere to the rules of engagement when issuing third-party appointments, as outlined in the Tax Administration Act, 28 of 2011, being:

• Letter of Final Demand: Receiving a Letter of Final Demand confirms you are on SARS’ hit-list for outstanding taxes. The Demand provides you with two means of response: dispute or debt relief. A response must be filed within 10 business days from receipt of the Demand. The taxpayer should wisely use this time to fortify their defences while planning their next move.
• Notice of Third-Party Appointment: Failure to comply with the terms set out in the Demand, prompts SARS to advance to the next battle phase. A notice is issued to the third party, alerting them to their obligation to pay the money owed directly to SARS on behalf of the offending taxpayer. 

Although the attachment of funds from your bank account is a setback, it is not the end of the war, but merely ground lost. Thus enters the heroes fighting for justice: taxpayers, assisted by their tax and/or legal representatives, have the right to challenge SARS to a duel of procedural fairness. A crucial step in the broader war against non-compliance.

Taking Back Your Wealth

When duelling SARS, it’s mission critical to ensure your troops are rallied and you are armed with the strongest available firepower: evidence that SARS did not follow correct procedure.

• The Counsel of Wisdom: When navigating this tricky and unfamiliar terrain, it is essential to seek the counsel of trusted advisors. Accountants, tax practitioners, and attorneys offer vital alliances to the indebted taxpayer by helping them understand their rights and formulating battle plans.
• The Power of the Pen: Armed with knowledge, and accompanied by seasoned veterans, the duel begins when pen is put to paper, and substantiating grounds are drafted, forming the basis of SARS refunding the attached funds.
• Summoning the Fabled Warrior: If you opt to go at it yourself, and your written submission does not yield the desired outcome, consider it a sign to perform the ancient ritual, summoning the fabled Tax Debt Specialist. Adding this ferocious warrior to your ranks will provide an alternative path for justice and ensure your legal protection against further financial harm.

Legal representation ensures accurate understanding of procedure and increased chances of success.

Embracing Justice and Reclaiming Peace

While tales of SARS’ war on non-compliance may strike fear into the hearts of South African taxpayers, you do not have to be a casualty of war. By understanding the procedure outlined within the Tax Administration Act, taxpayers and their allies are empowered to protect their rights. Where lawful collection procedure is not followed, the path to reclaiming attached money lies in seeking counsel and calling upon seasoned experts to back you all the way.

This will ensure the necessary steps are taken to protect yourself, and your war chest, from falling victim to a late-night SARS raid, or even worse, being handed over for external debt collection!

Ideally, all correspondence received from SARS should be immediately addressed by a qualified tax specialist or tax attorney. This will serve to build up your defences, as well as protect your financial interests against SARS implementing collection measures. 

Written by Jashwin Baijoo, Head of Strategic Engagement & Compliance at Tax Consulting SA