Nico Theron is the founder of Unicus Tax Academy and Unicus Tax Specialists SA, the latter being a niche advisory firm that, among other things, specialises in tax disputes. The firm claims to have a 100 percent win rate in matters concerning tax disputes. We spoke to Theron about how to avoid disputes and how to handle them when they do arise. 

 Be careful of ‘run of the mill’ tasks  

It’s worth pointing out that disputes often arise without fault from the tax practitioner or the taxpayer, and the mistake lies with SARS. However, there are instances where disputes come about because of what seemed like a trivial tax compliance point that practitioners gave little thought to at the time.  

“When you do a lot of tax compliance, for example, you may unintentionally forget to apply your mind in filling out the tax return. You may forget something, and then the additional assessment falls,” says Theron. 

He has a lot of empathy for practitioners who often don’t have the time and resources to apply their minds to the extent the law requires, as their business models don’t justify it. 

“I try and stay clear from compliance as best I can because, technically speaking, every time you fill out a form, you’re supposed to apply the law and consider the law for everything. It’s just not possible if you are sausage machining 10 or 15 returns a day.” 

Stay in your lane. If you venture out, bring in expertise  

“If you’re someone who does individual tax returns for a salary earner, you need to know all the law surrounding that, which is, quite frankly, not as simple as it often seems, and you need to be careful then of venturing outside of that space,” says Theron.  

It’s also worth being as knowledgeable as possible regarding aspects of the tax law that affect your business. Theron describes talking to someone recently who had a different view regarding a particular transaction. He recalls the person justifying their stance by saying, “That’s my gut feeling”. Theron believes this is a dangerous approach in the disputes space. 

“Gut feelings do not drive tax consequences. If you could tell me what the section or the caselaw or whatever is, then we can have a constructive discussion. I think that goes back to that automated process way of doing things. An attitude that something must be right without any substantial backing for that view.  

“That’s a recipe for disaster.” 

Walk a mile in SARS’ shoes to shorten your dispute journey  

If you end up in a dispute, it may be worth fighting back the instinctive urge to be combative rather than reflective.  

“I always say you can’t change someone’s mind if you don’t understand their views,” says Theron. Based on this principle, a core element of his approach to disputes is to try and understand how SARS sees the matter before attempting to change their minds. 

“We often find that there’s a miscommunication between the general practitioner and SARS when there’s a dispute. Even in simple disputes, SARS is going in one direction in their view, and the tax practitioner or the taxpayer is going in a different direction because they misunderstand each other. And then the case drags on and on.”