Applying for a tax debt compromise? Include these eight things in your application letter

43984, 16 Sep. 2014

Tags: sars, tax debt compromise

Let’s say your company is in financial distress. You then realise there’s a process you can use to solve your dilemma so you can avoid SARS penalties: A tax debt compromise.
You decide you’ll apply for a tax debt compromise and ask SARS to “park” your outstanding tax debt.
But you don’t know what to include in your application letter.
There’s no need to fret, we’ve got you covered.
Here are the eight things you must include in your application letter when you apply for a tax debt compromise.
Your application letter for a tax debt compromise must include the following eight pieces of information
#1: You must include your name;
#2: Your reference numbers for the respective tax debts;
#3: The amount of outstanding tax debt for which you’re making the tax compromise application. You can get this from a statement of account from the SARS eFiling website;
#4: Have a brief introductory paragraph telling SARS you want to make an application for a tax debt compromise in terms of Part D, Sections 200 through 205 of the Tax Administration Act;
#5: You must outline the case for the tax debt compromise and give reasons why you can’t settle your tax debt and are looking for a tax compromise.
#6: Include a paragraph to disclose the settlement amount you’re offering. Give a brief explanation as to how you got to that amount. Very simply, “this is all I can afford to pay” will suffice.
#7: Include all your contact details – email, home and work landline, cell numbers, postal address etc. Also indicate how you prefer SARS to contact you (email is likely the most reliable).
#8: Lastly, have a conclusion paragraph stressing the tax compromise will be the most beneficial outcome for SARS and will result in the highest net return.
You can only send your letter to SARS when it has all this information.
Knowing what to include in your application letter when you apply for a tax debt compromise will help ensure you don’t leave anything out.

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