Taxpayers beware: the person you trust to keep you compliant with Sars could be the very person exposing you to financial ruin, criminal prosecution and reputational damage.

For many South African taxpayers, appointing a tax practitioner is an exercise in convenience. You hand over your financial documents, provide access to your Sars eFiling profile and assume your tax affairs are in capable hands.

That assumption could prove extraordinarily expensive.

Fraudulent tax returns, fictitious VAT refund claims, forged supporting documents and the abuse of taxpayers' trust can turn an apparently routine tax engagement into a nightmare. The consequences may extend beyond additional assessments and penalties to substantial tax liabilities, recovery action and criminal prosecution.

The most alarming part? Sometimes, the alleged wrongdoing originates with the very person entrusted with ensuring compliance.

The R9.6-million warning: When tax returns become criminal evidence

The case involving Eastern Cape tax practitioner Francis Muleso illustrates the potential scale of the problem.

According to reports published in October 2026, Muleso was arrested by the Hawks in connection with allegations of tax fraud involving financial prejudice to Sars exceeding R9.6-million.

The allegations relate to returns submitted between March 2016 and March 2020. Investigators reportedly found that a close corporation had submitted nil income tax returns despite allegedly generating taxable income.

Further examination of its banking records and tax declarations reportedly revealed substantial discrepancies in its VAT affairs, including the understatement of output VAT by more than R2.7-million and the overstatement of input VAT claims by more than R6.1-million.

Muleso was granted bail of R50 000, and the matter was postponed to 18 January 2027. These remain allegations, not a finding of guilt.

The lesson is stark: a tax return is not merely an administrative document. Where deliberate deception is suspected, it can become evidence in a criminal investigation.

Taxpayers cannot safely assume that appointing an intermediary automatically absolves them of responsibility. What was submitted, who authorised it, what each person knew and whether criminal intent can be established may all become critical questions.

The ghost practitioner: A wolf in professional clothing

A fraudulent or so-called ghost practitioner may falsely claim professional credentials, operate outside the appropriate regulatory framework or exploit a taxpayer's limited understanding of tax legislation.

Some promise unusually large refunds, guaranteed reductions in tax liabilities or access to supposed insider connections at Sars. Others request unrestricted access to eFiling profiles while providing little transparency about the returns they submit.

The danger often emerges only when Sars rejects a refund, identifies discrepancies, issues an additional assessment or initiates an investigation.

By then, the practitioner may have disappeared, money may have been diverted, and the taxpayer may be left trying to reconstruct what was submitted in their name.

The risks include:

• False returns: Income omitted, expenses inflated or deductions claimed without supporting evidence.
• Fraudulent refunds: VAT or income tax refunds claimed without a legitimate entitlement.
• Misappropriated payments: Money intended for Sars diverted into another person's account.
• Unauthorised access: Taxpayer profiles altered or controlled without proper oversight.
• Missed deadlines: Objections or appeals not properly lodged, potentially compromising the taxpayer's ability to challenge an assessment.

Not every unregistered individual is necessarily fraudulent, and registration alone does not guarantee competence or integrity. Taxpayers should verify credentials and examine the substance of the services being provided.

Trust without verification is a dangerous strategy when your tax affairs are involved.

Six years behind bars: The Michael Benson case

The conviction of former Sars employee and registered tax practitioner Michael Benson demonstrates that tax fraud can result in imprisonment.

In November 2025, the National Prosecuting Authority announced that Benson had received an effective six-year direct imprisonment sentence following convictions for fraud, forgery, uttering and failing to keep proper records.

According to the NPA, Benson submitted 11 fraudulent VAT returns claiming approximately R1.7-million in refunds, of which Sars paid approximately R1.58-million into his bank account.

When Sars requested supporting documents, he produced further documents found to be forged, including purported tax invoices, bank statements and municipal contracts.

His convictions included 11 counts of fraud relating to VAT returns and multiple counts involving forged supporting documents.

The implications are unmistakable: professional registration does not place a practitioner beyond the reach of criminal law.

The R26-million tax fraud case: Registration is no guarantee

In October 2024, television producer and businessman Dumakude Mayivuke Ndlovu appeared in court alongside two co-accused in a tax fraud matter involving approximately R26-million in personal and company income tax.

According to a joint statement by Sars and the Investigating Directorate Against Corruption, the charges related to alleged tax fraud involving the businessman's personal and company tax affairs.

The co-accused included Rodney Mutsharini, a registered tax practitioner who assisted with personal income tax, and Maxwell Mloyi, an unregistered practitioner who assisted with company income tax. 

The three were charged following their arrests on 30 September 2024.

The case highlights why taxpayers must look beyond professional titles and assurances.

The involvement of a practitioner does not automatically establish a taxpayer's guilt. Equally, a taxpayer cannot assume that responsibility disappears simply because someone else prepared and submitted the returns.

Criminal liability must be determined on the evidence. Nevertheless, taxpayers should understand that questionable tax arrangements can expose everyone involved to serious scrutiny.

When Sars discovers the fraud, the consequences can multiply

An irregular return may initially pass through the system without immediate intervention. That does not mean the arrangement has escaped detection.

Sars can identify discrepancies through audits, verification procedures, banking information and other available data. Suspected criminal conduct may subsequently be referred to law enforcement.

Depending on the circumstances, the consequences can include:

• Additional assessments: Sars may reassess tax liabilities where returns or claims are incorrect.
• Understatement penalties: Where statutory requirements are met, penalties may be imposed under the Tax Administration Act, depending on the nature and severity of the taxpayer's behaviour.
• Interest and recovery action: Outstanding liabilities may attract interest and become subject to lawful collection measures.
• Criminal prosecution: Where the evidence supports criminal charges, taxpayers or practitioners may face prosecution and, upon conviction, imprisonment or other legally prescribed sanctions.

Not every mistake constitutes fraud, and a disputed assessment does not automatically establish criminal wrongdoing. However, taxpayers should never confuse the absence of immediate intervention with proof that a questionable arrangement is safe.

The final warning: Choose your representative carefully

Complex Sars disputes require more than the ability to upload documents to eFiling. They may demand a detailed understanding of tax legislation, procedural requirements, evidentiary issues and the legal remedies available to taxpayers.

Tax practitioners and accountants can provide valuable services within their respective competencies. 

However, contentious assessments, allegations of fraud, criminal investigations and complex disputes may require specialist legal expertise.

A tax attorney can evaluate the merits of a dispute, advise on statutory rights, challenge assessments where justified and develop an appropriate legal strategy.

Confidential communications with a practising attorney for the purpose of obtaining legal advice may attract legal professional privilege, provided the applicable requirements are satisfied. Privilege is not automatic for every communication or document, and it does not protect fraudulent conduct.

The cost of obtaining the wrong representation may be insignificant compared with the consequences of a substantial assessment, lost procedural rights or a criminal investigation.

When it comes to Sars disputes and complex engagements, being represented by a tax attorney, not only guarantees legal privilege, but also ensures better representation than an ordinary tax practitioner or accountant.

The legal position requires qualification: privilege depends on the applicable law and circumstances, while effective representation depends on the attorney's competence, experience and conduct.

South African taxpayers must therefore choose their representatives carefully, verify their credentials and insist on accountability.

When Sars comes knocking, the question will not simply be who submitted your return. It will be whether that return was correct, what evidence supports it and what the law says about the conduct of everyone involved.

Do not wait for an audit, a rejected refund or a criminal investigation to discover that the person entrusted with protecting your tax affairs may have put them at risk. Verify. Review. Comply. And when the dispute becomes complex, secure appropriate legal representation before the consequences escalate.

Written by Jashwin Baijoo, Partner and Head of Strategic Engagement & Compliance at Tax Consulting SA