SARS Issues Urgent Tax Scam Warning

by Robert Lee, Tax-News.com, London

01 September 2006

The South African Revenue Service (SARS) has issued an urgent warning to business and individual taxpayers about a scam which attempts to dupe victims into believing they have been mistakenly paid a tax refund by the tax department.

The most common approach of the scam according to SARS is a fraudulent letter faxed to a taxpayer – mostly a registered business – that informs them that a tax refund was mistakenly paid into their bank account. In some instances taxpayers are contacted by telephone or post.

The letter urges the taxpayer to deduct bank charges and pay the balance into a bank account which supposedly belongs to SARS. The amounts range anything from R50,000 to R1 million (US$7,000 to US$140,000).

"SARS wants to caution taxpayers not to pay any money into such accounts after receiving letters. It is not part of SARS’ procedure to issue letters of this nature that claim that a refund was mistakenly been issued to a taxpayer," the tax department stated in its alert.

"It must be emphasised that, in the unlikely event that a refund is mistakenly issued by SARS, SARS has the procedures in place to withdraw the money without involving taxpayers or demanding from them to transfer money," the alert explained.

The following guidelines have been issued by SARS to help those who have received letters from suspected fraudsters:

• Taxpayers must check their accounts to see if the funds allegedly paid into their accounts originated from a cheque deposit;
• In many instances the money would be reflected, however the account holder must verify with their bank the source of the deposit and whether or not the account number into which the deposit is asked to be made is a SARS account;
• Money paid through a cheque deposit may appear in the bank account but the cheque in most cases is a fraudulent cheque;
• Communication by the suspected fraudsters normally contains only cellphone numbers as contact details that the taxpayer can use;
• All authentic SARS correspondence has landline numbers.

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