Signs of an unreliable tax return preparer

WITH tax season in full swing, the SA Institute of Tax Professionals (SAIT) is urging tax payers to watch out for the top five signs of a crooked ‘consultant’.

‘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.’

Warning signs

• Questionable preparers are quick to promise refunds or compile returns without looking at underlying documentation. Refund claims and deductions must be justified. Do not get caught out when SARS conducts an audit – you alone will bear the price.

• They 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.

• They often do not sign returns because they lack legal status. Preparers must be registered with SARS as tax practitioners via a recognised controlling body. You can verify a practitioner’s status by obtaining their practitioner registration number and verifying it on the SARS website.

• Questionable preparers lack experience. To be a practitioner at SAIT, members must have a minimum of three years of tax experience if they have a university degree. Other professional bodies have their own requirements that must similarly meet SARS standards of expertise.

• They may ask for cash to resolve a dispute with one of their ‘friends’ inside SARS. This offer may sound tempting, but it could just as easily be part of a scam to falsely take money from you.

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

‘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.’