Sibusiso Thungo and Aysha Naino

Client’s relationships usually start very well, at times it’s like love at first sight. All party’s sign on the dotted lines and everything is just superb.

Let us posit for a moment that all services were rendered perfectly and initially, all payments are made timeously. All the required Tax services have been rendered, then suddenly the possibilities of an unpleasant future that includes commotions to the professional relationship loom.Often we get queries and formal complaints lodged against tax practitioners for refusing to release the e- profiles of clients that have terminated their mandate and appointed a new tax practitioner. Why are the Tax practitioners so resolute to this tactic? Tax practitioners declare in their defence that it is the only way to reclaim their fees.

Who owns the e-filing profile?

The e- profile is created on the SARS portal to assist Tax Payers as well as Tax Practitioners in meeting their statutory requirements. The e- profile is the property of SARS and no individual or company has a right to claim it as their own.

The effects of holding the e-profile ransom

Preventing a client from accessing his profile may constitute a criminal offence in terms of sec 234 of the Tax Administration Act.The misconduct of the Tax Practitioner may also result in his Tax Practitioner status being revoked by his controlling body.The SAIPA code of conduct requires all members to act in a professional manner and with integrity, carelessly bringing the institute into disrepute comes with consequences.Tax Practitioners should find alternate means of settling the payment dispute with their clients without resorting to ransom approach.

Doing the right thing

Tax Practitioners are warned to follow the correct legal procedures when collecting debt. Consider common-sense when trying to collect a debt on your own behalf. Below we have included some major tactics that should be avoided when collecting debt:

  1. Do not call the client at unreasonable hours
  2. Never lie about how much the client owes you or add additional fees or interest that were not part of the original engagement
  3. Never make it personal, always be professional
  4. Never charge a contingency fee for tax related work – it is illegal
  5. If you have a significant amount of uncollected debts, hire a reputable third-party debt collector and make sure that they adhere to the law when collecting debts.Tax Practitioners are advised to always have a letter of engagement in place positioning the procedure that the Tax Practitioner will take if the client is in breach of the engagement. We live in challenging economic times and the chances of a Tax Practitioner receiving a delinquent client are high.

In conclusion it is advisable that the new tax practitioner endeavour to discuss the e-profile matter with the former tax practitioner in writing. Should this courtesy discussion fail, the tax practitioner should consider reporting the matter to the controlling body of the defaulting tax practitioner.