ONLINE EXCLUSIVE: Top signs of an unreliable tax return preparer

In these troubled economic times, some are seeking to earn extra earnings as tax return preparers despite their lack of training and experience.

Others are seeking to use their so-called expertise to defraud SARS or you as the client.

When seeking tax advice and assistance with the preparation of your tax return, we strongly suggest care be taken to ensure that the preparer is of high quality and of good repute.

Also read: Tax workshops offered

Here are typical signs of trouble:

• Questionable preparers are quick to promise refunds or compile returns without looking at underlying documentation. Refund claims and deductions must be justified. Don’t get caught out when SARS conducts an audit for you alone will bear the price.
• Questionable preparers set fees that are wholly or partially based on percentages of promised refunds. This arrangement often creates the wrong incentive to inflate or falsify refunds, which will again fall squarely on you.
• Questionable preparers often do not sign returns because they lack legal status. Preparers must be registered with SARS as tax practitioners via a recognised controlling body (see section 240 of the Tax Administration Act). A tax preparer’s signature is the key sign that they are willing to stand by their return.
• Questionable preparers lack experience. To be a practitioner at South African Institute of Tax Professionals (SAIT), members must have a minimum of three years of tax experience if they have a university degree. Members without a university degree must generally have five years of tax experience and provide SAIT with a logbook of practical tax experience. Other professional bodies have their own requirements that must similarly meet SARS standards of expertise.
• Questionable preparers may ask for cash to resolve a dispute with one of their “friends” inside SARS. This offer may sound tempting. However, this offer could just as easily be part of a scam to falsely take money from you. Even if the preparer does have someone on the inside, these insiders are known to have placed your tax debt on “suspension”. This suspension provides a false delay and can be lifted at any time.

In short, don’t cheat the system because this could leave you with SARS criminal penalties.

That said, there are many good tax practitioners in South Africa that can help you.

Fees for Individual (IT12) returns are often very reasonable (typically from R1 200 to R6 000) depending on the complexity of the return.

These rates are a very small price for a good night’s sleep.

Also read: SARS makes tax easy

You can verify practitioner status by:

• Obtaining their practitioner registration number.
• Verifying their practitioner registration on the SARS website: https://secure.sarsefiling.co.za/TaxPractitionerQuery.aspx or with their stated professional body.