Pieterse TRM Erasmus Inc won another matter yesterday with SARS conceding defeat after the filing of a Rule 32 court response.
SARS realised that their procedural steps were fatally flawed.
They had provided very scant reasons ( a few words – “insufficient evidence”) on assessment.
However, they also effectively conceded the merits of the matter as well involving the deduction of interest on borrowings where the taxpayer was not a money-lender.
The team partially relied on an old practice note that is still operative.
The principles applied in this tax matter emanate from the Certificate in Tax Dispute Resolution course taught by Schalk Pieterse with Prof. Dr. Daniel N Erasmus – a must for any tax advisor remotely involved in tax disputes.
The course also covers what will now be a focal point of SARS after Commissioner Kieswetter’s recent announcement – an agreement with the prosecuting authority to up convicting so-called tax fraudsters. You may think that doesn’t apply to you, but see a recent posting on this website:
Financial fraud concerns that will impact tax fraud against corporates
Posted on October 10, 2019.
There is a growing concern that accounting practices are bordering on rubber-stamping what could be classified as fraudulent activities.
“Fraud” is widely defined as: “a person or thing intended to deceive others, typically by unjustifiably claiming or being credited with accomplishments or qualities.” AND “wrongful … deception intended to result in financial or personal gain…”[which also covers criminal deception – where intent to deceive can be proved].
That is wide.
So if financial statements can be proven to be fraudulent, that opens the door to tax fraud and jail sentences, as tax returns are based on financial statements. If you as officers of the taxpayers are “blind” to the “potentially fraudulent rubber-stamping by auditors” that could place you in a very precarious position, criminally. No officer of a company wants to face that. Blame it on your auditors, but if you are complacent you could be a co-conspirator – also GUILTY. So it is no longer a defence that you hide behind your auditors.
Please read the attached articles – https://iitfconnect.com/?p=2115