Income Tax: Agent Appointment Implementation

[Cream]

I was going through previous posts in the Tax Forum and I couldn't find anything related to Agent Appointment Implementation. It seems as if I'm the lucky one

Our company recently received a letter from SARS, Income Tax: Agent Appointment Implementation. SARS is appointing employers to act as agents to collect any outstanding administrative penalties due to SARS from taxpayers.

Apparently section 99 of the Income Tax Act No. 58 of 1962 allows SARS to appoint employers to act as an agent on its behalf.

We had an employee work for us for three months only from Nov 2009 - Jan 2010 on contract which after that he was employed permanently by our client.

Can SARS hold agents accountable for outstanding tax, even if the employee doesn't work for the company anymore?

If SARS can implement something like this, next thing the debt collectors are doing the same. I'd hate to receive letters from Edgars, etc of staff not paying their accounts...

[Dave A]

Your company will be one of the first, then. There was an announcement that they'd be doing this (rather than obtaining garnishee orders) a few months ago. It's an extension of what they've been doing with banks for a couple of years now.

I think all you need do in this instance is point out that the person is not currently an employee of the company.

As for legitimacy (from memory, I stand to be corrected) - they're relying on a section of the tax act from 1962 that empowers SARS to appoint as their agents persons that have control over an asset of a person they're trying to collect tax from. It is suspect as to whether this particular form of collection was the original intention, but which "agent" is going to plough money into contesting it?

There is a legal challenge being mounted (don't know how that's going just at the moment), but in the meantime it seems any "agent" appointed has little choice but to comply.

[Cream]

Income Tax: Agent Appointment Implementation

There is a legal challenge being mounted (don't know how that's going just at the moment), but in the meantime it seems any "agent" appointed has little choice but to comply.

When the agent appointment is initiated, the agent will receive an ITA88 Notice of Agent Appointment. This notice legally binds the agent to transfer the penalty amount due to SARS by the date stipulated on the ITA88 notice. Should the agent neglect to pay it over to SARS, he/she will be personally liable for the tax debt as provided for in section 97 of the Income Tax Act, and may be criminally prosecuted according to section 96. It is the agent’s responsibility to inform SARS if he/she is not in a position to fulfil his/her obligations as an agent.

[Cream]

Another letter from SARS, Income Tax: Agent Appointment for the same person for a different amount, for a different tax year and still this person doesn't work for me. Surely SARS can understand this, REALLY it's not that difficult...

After phone calls, emails sent, they are still sending me Agent Appointment post!

[Dave A]

Probably a different person from SARS to report to as well.

I don't know how collections are allocated to staff - probably by lucky dip or it's just a free-for-all. And each new collection agent doesn't seem to fuss about reading any notes that might have accumulated.

I guess it could carry on until someone else picks up the title of "last known employer." Maybe try draw the agent's attention to the fact that this is the second time, and isn't there a note in their system somewhere from their last attempt that this person is no longer employed by you ?

And if there isn't, ask them to make one.

[Pastel Payroll Consultant]

Good Day

Some information that you might find usefull.

SARS issues ITA88 notices via the Post or Easyfile. If your Easyfile has been synchronised with your Efiling then you will be able to receive ITA88 notices on Easyfile. Once the notice is read it will then be removed from your inbox and appear on The Agent Appointments menu. You may then choose the relevant outcome , in your case it would be "Tax Payer not Employed" and submit. This would send SARS a message that you unable to fulfill you obligation as an agent for this specific individual.

You can log on to the SARS website to get more information on these procedures.

Kind Regards