OTO Intervenes After SARS Fails to Cancel Disputed Tax Debt
A recent case 30 was published by the Office of the Tax Ombud (OTO) highlights how delays and administrative errors at SARS can cause unnecessary financial stress for taxpayers — even after disputes are resolved in their favour.
The Case Background
In December 2022, a taxpayer submitted their income tax return using data pre-populated by SARS without verifying the information. This led to the inclusion of three incorrect IRP5 forms, resulting in SARS assessing a tax debt of R48,992.47.
The taxpayer recalculated the return without the errors and found the actual amount due was R36,942.07 — which they paid. They then lodged an objection for the balance (R12,050.40) and requested a suspension of payment. SARS allowed the objection, meaning the disputed amount should have been reversed.
SARS’s failure to reduce the assessment
Despite allowing the objection, SARS failed to issue a reduced assessment. The system continued to reflect the R12,050.40 as outstanding, and SARS wrongly initiated debt collection — including appointing a third party to recover the amount from the taxpayer.
This third-party appointment, often involving salary deductions or bank withdrawals, was completely unjustified in this case.
How it was resolved
The OTO found SARS at fault and recommended:
Immediate withdrawal of the third-party appointment.
Issuance of the reduced assessment to reflect a zero balance.
The intervention not only helped the taxpayer but also spotlighted a broader problem: systemic delays in processing suspension of payment requests.
Key takeaways
Always double-check pre-populated return data before filing.
Promptly object and request suspension of payment if they notice errors.
SARS is obliged process reduced assessments without delay once an objection is upheld.
Accountants and tax practitioners should be alert to unfair debt collection actions and advise clients to seek assistance from the OTO when necessary.
This case is a reminder that the OTO plays a vital role in ensuring SARS treats taxpayers fairly, and that flaws in SARS’s systems can have real financial consequences if not addressed quickly.
