It is important to note that verifications and audits are two different processes. In a simple explanation, verification is the "straightforward" process to confirm if the information you declared on your tax return is true and correct, whilst an audit is where the tax return is under deeper investigation which means they look at the finer details. 

Supporting documents request

If SARS decides to review your tax return, they will notify you via a SARS letter on which they will either ask you for ALL your supporting documents applicable to the details declared on your tax return, or a specific list of documents you need to upload and submit to SARS.

Please be vigilant and ensure you read the SARS letter in full - this is a letter that should not be hastily skimmed.

For both verifications and audits, it is SUPER important to submit all the correct information/documents requested within the SARS letter.

You will need to ensure that you read the letter in detail. Some SARS letters provide an exact list of documents they require, however, there is a PITFALL in that some other letters, where SARS requests supporting documents to support ALL of your income declared, deductions and exemptions claimed, they provide an example list of documents which is NOT the full extensive list of documents they require. If you only submit the example list of documents, SARS will disallow the other deductions and exemptions for which you did not provide the applicable supporting documents.

Screenshot of the SARS letter where they request all documents and only provide an example list:

If you do not provide all the necessary documents to SARS, you stand a high risk that SARS will issue an additional assessment on which they will disallow some or all deductions claimed on your tax return. Once SARS has issued an additional assessment, you are no longer able to request a correction on your tax return. You will then need to file a dispute to request a correction on the assessment with all the applicable supporting documents. It is important to note that this is quite a lengthy process and will therefore delay the refund due to you, if applicable.

VERIFICATION

What to expect during the verification

• SARS will notify you of the verification via SARS letter.
• SARS should complete the verification within 21 working days from the date the relevant supporting documents were submitted to SARS.
• SARS may request additional documents if the documents previously provided were not sufficient.
• If SARS is not in agreement with what is declared, they will issue a new assessment with the adjustments.

What to expect when the verification is finalised

The verification can result in one of the following:

1. Notification that the verification was finalised with no adjustments. In simple terms, SARS has accepted the tax return as is and did not issue a revised assessment. In this case, they usually issue a Completion Letter.
2. Notification that the verification was finalised which resulted in adjustments being made on the tax return and a revised assessment was issued. In simple terms, SARS was not in agreement with the details declared on your tax return and has issued a revised assessment.
3. Notification that your tax return is referred for an audit and further documents must be supplied.

It is important to note that even though the verification has been finalised, SARS could still refer your tax affairs to be audited as part of the SARS compliance process.

AUDIT

What to expect during the audit

• You will be notified by SARS notification that your tax return is under audit. They will also send you another notification in which they will request the additional supporting documents you need to upload and submit to SARS.
• SARS may also request additional documents multiple times to complete the audit.
• SARS may decide to do an onsite inspection.
• The turnaround time for the audit to be completed could be anything from 30 business days to 12 months, or even longer, depending on the complexity of the case, the volumes of the transactions involved and the level of your cooperation.
• If you require further assistance, you can contact the specific auditor (SARS official) indicated in the SARS letter.

It is important to note, that audits are a more invasive process where SARS will require the finer details of your income, expenses and exemptions declared n on your tax return.

What to expect when the audit is finalised

At the conclusion of the audit, SARS strives to:

• Issue an Audit Findings Letter informing you of the potential adjustments identified on which they will provide you with at least 21 business days to respond to confirm if you agree, or if you disagree, with the applicable supporting documents to support your view.
• Finalise the audit within 90 business days from the date all the required supporting documents were received.
• Issue a Finalisation of Audit Letter outlining the basis for the assessment, including amounts, where SARS found that your tax position is incorrect or issue a Final Audit Letter to conclude the audit where no findings were made.

If you did not agree with SARS Audit Findings Letter (or did not respond to this letter) and SARS is still of the opinion a revised assessment must be issued, SARS will consider the imposition of understatement penalties. This will apply if there is an understatement of income. The penalty can vary from 0% to 200%.

If you are due a refund, it will only be paid out after the verification/audit has been finalised. A revised assessment could result in an amount due to SARS.

If SARS issued a revised assessment and you are not in agreement, you are able to dispute it by submitting an Objection.

Q & A

1. Who can be selected for verification?

SARS may select any taxpayer for verification as part of their tax administration efforts, which can include a risk-based selection process.

2. What must I do if my tax return is selected for verification?

You will need to submit the requested supporting documents as per the SARS letter before the due date or, alternatively, submit a correction of your tax return if there was a mistake made on the original submission.

3. How must I submit the supporting document to SARS?

If you submitted your tax return through TaxTim, you can submit the supporting documents through your TaxTim account.

You can also submit the supporting documents:

• Directly on the link opened on eFiling
• Through the SARS Online Query System (if a link is opened on eFiling, it is best to submit the documents through the specific link)
• SARS appointment

4. I only submitted some of my supporting documents to SARS, how can I submit the rest of the documents to SARS?

Once documents are submitted to the link opened on your eFiling profile, you are no longer able to add documents to the submission and you will need to submit the missed documents to SARS Online Query System with the applicable case number as per the SARS request letter.

5. Is there specific standards for the documents that must be uploaded to SARS?

Yes, there are the following standards:

• The file type may be .pdf, .doc, .docx, xls, .jpg and .gif. The preferred document type is a PDF document.
• Maximum document size per document is 5MB
• A maximum of 20 documents may be uploaded

6. What should I do if I have more than 20 documents to upload and some of them are more than 5MB?

You can use websites like Smallpdf to compress the documents which are larger than 5MB or combine documents to have less than 20 documents to upload and submit.

7. What will happen if I do not submit the supporting documents?

If you do not submit supporting documents to SARS or submit a RFC (Request for Correction), SARS will issue you a follow-up letter. If you still do not do the necessary within the specified timeline, SARS will issue a revised assessment based on the information available to SARS.

8. SARS issued an additional assessment in the finalisation of the verification, I am not in agreement. What should I do?

If you are not in agreement with the additional assessment and you have all the necessary documents to confirm. You can submit an objection to request a correction on the assessment.

9. SARS issued an additional assessment and I am not in agreement. Can I submit a Request for Correction?

No, unfortunately not. Once SARS issues a revised assessment, you are no longer able to submit a tax return correction on eFiling and must proceed in submitting an objection.

10. Will my refund be paid out even though my tax return is referred for verification/audit?

No, unfortunately not. SARS will only pay out the refund once the verification/audit has been finalised. SARS normally pays out the refund within 7 working days from the date the verification/audit has been finalised.