Are you or your business in a dispute with SARS? Are the right people helping you with your company's dispute? Do you know your rights as a taxpayer?

Increased enforcement by SARS presents a substantial need for businesses to have a trusted and experienced tax dispute resolution resource.

Depending on where you are in the dispute process, it is important that the right mix of subject-matter specialists and dispute resolution specialists are involved to ensure that the right combination of tax technical expertise is paired with a thorough understanding of tax administration and procedure to secure optimal outcomes.

A typical cycle for a taxpayer involved in a dispute with SARS has the following phases and steps:

Phase I Phase II Phase III
  1. Submission of tax return
  2. Issuing of an assessment
  3. Audit of client (commences with a notification of audit and request for relevant material)
  4. Provision of requested relevant material
  1. Letter of audit findings (LOAF)
  2. Response to LOAF
  3. Finalisation of Audit Letter (FOAL) and assessment (either additional or reduced which we'll refer to as the "audit assessment")
  4. Objection to audit assessment (Objection)
  5. Allowance or disallowance of Objection
  1. Appeal to disallowance of Objection (Appeal)
  2. Alternative Dispute Resolution (ADR) meeting
  3. Tax Court litigation
  4. Appeal to Full Court of the High Court or to Supreme Court of Appeal
  5. Appeal to the Constitutional Court

Who should be involved?


In the early stages of a dispute with the tax authorities, it is acceptable for the person who prepared the tax return, i.e., either the taxpayer or their tax practitioner, to oversee and run with steps 1 – 4.


The response to a LOAF that deals with the technical tax accounting aspects as well as the legal interpretation of certain provisions may result in the audit being concluded in a client's favour with there being no need to embark on the further steps in the process. This is the best-case scenario for any client.

However, if SARS is dissatisfied with the responses to the LOAF, step 7 kicks in and a FOAL and audit assessment are issued. It is imperative, and to the taxpayer's advantage, that a lawyer with tax dispute resolution experience be involved from step 8 onwards as the grounds of objection frame the parameters of the dispute with SARS going forward.


If, at step 9 the objection is disallowed, the taxpayer has a right to appeal. An appeal, prepared at step 10, addresses the disallowance of objection while remaining within the parameters of the grounds raised in the objection. In the event that the dispute is not settled at ADR and goes to the Tax Court, SARS will respond to the grounds of appeal.

The ADR meeting at step 11 is not compulsory, but is recommended to attempt to resolve the dispute without resorting to litigation. The ADR meeting can be attended by the taxpayer and the tax lawyer, with the tax lawyer taking the lead. The taxpayer will fare better by having legal representatives to meet the contentions by SARS, with support of external accountants if and when required.

If ADR either fails or is not elected as an option, the taxpayer has a right to proceed with the appeal to Tax Court. From this point onwards, the taxpayer can only be represented by a tax lawyer i.e. a practising attorney. The tax lawyer will be ably assisted by tax counsel who is a litigation specialists coupled with knowledge of tax law. Only a practising attorney or counsel may appear in the Tax Court to represent the taxpayer.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.