SARS wins eFiling case after taxpayer’s R1.38m refund claim

The South African Revenue Service (SARS) has won a Tax Court case against a taxpayer who disputed responsibility for fraudulent tax returns that resulted in a R1.38 million refund.

According to Daily Investor, the case involved revised income tax returns for the 2020 and 2021 tax years that included fabricated farming assets and expenses, as well as inflated IRP5 and PAYE credits.

The taxpayer, a salaried individual with no genuine farming business, later claimed that an unidentified SARS official had used her eFiling credentials to submit the fraudulent returns, the report said.

However, the Tax Court rejected the explanation and upheld a 150% understatement penalty, finding that the conduct amounted to intentional tax evasion.

Tax penalty

According to Polity, SARS initially paid the taxpayer about R1.38 million before reversing the refund after an investigation. The resulting assessments totalled about R3.6 million, including more than R141,000 in interest and an understatement penalty of about R2.08 million.

The taxpayer’s explanation that someone else had accessed the eFiling account was undermined by a lack of supporting evidence, while her version of events changed during the proceedings. The court found SARS had met its burden of proving the case on a balance of probabilities.

Legal experts Anton Lockem and Daniel Robb told Daily Investor that the case should not be interpreted as meaning that possession of eFiling credentials automatically proves that a taxpayer personally submitted disputed returns.

‘The bottom line is that the MLC case is valuable as an evidence case,’ they said. ‘The court was right on liability and the 150% understatement penalty,’

They added that the case contained evidence beyond the eFiling records, including the taxpayer receiving and retaining the refund and failing to provide evidence that another person submitted the returns.

The case comes as SARS continues to encourage taxpayers to protect their eFiling credentials. *SARS *describes eFiling as an online platform used to submit tax returns, make payments and conduct other tax-related transactions.

---

Be the first to know – Join our WhatsApp Channel for content worth tapping into! Click here to join!

---

Also read:

SARS tightens grip on offshore transfers

Picture: @sarstax / x

Words: African Insider / Betha Madhomu

The post SARS wins eFiling case after taxpayer’s R1.38m refund claim appeared first on Cape Town ETC.