Good Day,

My friend who is a sole proprietor usually send her income tax supporting documents to accounting company in Kepong to help her fill in the form and submit.

Last 2 year ago; she receive a call and letter from Income Tax on requesting her present to audit her files for year 2013 declaration.
To her surprise, her income tax had been wrongly declare. Her salary was not included in the declaration.

She confronted the accountant in charge and highlighted this issue where she was charge of RM 34K for the wrong declaration made. An additional 50% penalty from the amount needed to pay.
The only respond from the accountant in charge was "Sorry" and offer to bear half of the penalty from his own pocket.

Then last year, she was ask again to review her 2014 and 2015 files which was the same issue - repeated.
This time it was an additional 100% penalty!!!! Total of RM 40K!!

She confronted him again but this time he kept saying he did not notice and etc; and will bring up to his management on how to resolve the matters.
As time pass within a month; there was no reply was given and further on not answering her calls. Called his office but wrong information and case scenario was given to his office by him.

A complain email was send to the office with 2 reminder which only then, the management respond and willing to sit down to discuss the matters.

Instead of compensating the penalty for the mistake made by their staff; they offer my friend few years FREE service as compensation.

My friend was totally unhappy as they will not undertake the penalty and said the staff is no longer with them hence they cannot do anything.

My question is; where can we made a lodge proper complain to get the penalty compensation from this accounting company?
3 years of penalty from the mistake made by the accounting company is unfair to her.

Right now her name is listed in "Senarai Pembayaran Cukai Gagal Patuh (SPGP)" for the coming 2016 and 2017 declaration.

Please advice where can we get action on such malpractice and unprofessional services.

Thank you.

Norm is there is wrong filling, ypur friend should request change of audit person or even switch firm.

For the compensation, try contact MIA. You need to find who sign your submitted audit because the person is responsible..

better hired lawyer...for fast response..and also legal advice..

Should pay a bit more and find reputable firm la.

Your friend also wrong, 1st year already got issues why still continue use?

Rm40k including penalty... so the tax under paid i presumed is RM20k. And thts a lot of salary unde declare.... around RM100,000 maybe.

Your friend receiving such high salary i m suppose he pr she won’t be just a normal clerk must be some senior staff. He should at least check the tax computation. I think that s why we always sign on the tax computation. You dodnt check and you sign = gg! You cant blame no one but urself bru....

your friend didn’t realise that she was paying very low tax or thr income shown in the tax computation was too low?

I think your friend knew it was under declared but thought can get away with it. No one to blame but herself. She is responsible for her own taxes and accuracy of the tax comp. The firm merely assists to fill up the tax comp.

Might want to consider legal actions against the company. It doesnt matter who did it, it was done while the person was under the employment of the company, hence they are liable for any problems that crop up ( the tax form will have their stamp ). Approach a litigations lawyer to see if he can send them a letter of demand for compensation. Actual compensation which optimally includes all the reparations to be paid to LHDN, the legal fees and any losses incurred due to this, not that free service bullshit as those dont cost much at all.

i thought before they submit the tax form they will seat and discuss with you. Also my tax agent did highlight on the responsibility and the consequences of each unlawful deduction. My take is ur friend was excited with the low amount to pay and straight away give green light to submit.

Chamge to a better accounting firm la. Then prepare lawyer letter to old accounting firm. Meanwhile go ask the new accounting firm of they can help settle with income tax. Big4 all got these types of services to help you nego on tax payment. If you are making that much money don't skimp on the service fees. Sometime being Able to sleep at night more important.

Which accounting firm is this ? Need to avoid

Get a lawyer and sue the tax agent. Audit firm, tax agent usually have professional indemnity insurance, so can claim from insurance.

If your friend engaged capalang accounting firm with no proper tax agent just because they were cheap, then its his own problem and he has to bear the penalties himself.

In Malaysia, most SMEs don't give a shit about the quality of accounting & tax services, they only want cheap. This is what cheap price will get you.

The Form B has to be signed by your friend and naturally examined by her before doing that, before submission by the agent.

How is it she never spotted the omission, and the lower tax as well, then question the agent ?

You mean she signed blindly and passed back to the agent?

Anyway, 100 % penalty is absurd.

Although they can impose that under the law, in practice nobody does that.

What I did in one case was write a complaint to the tax division of the Finance Ministry (the Inland Revenue is under them), explaining the situation, reminding them that the Inland Revenue has never imposed 100 percent Section 113 (2) penalty in its history.

I submitted the relevant Assessment Notices to them by email.

The immediately directed the Inland Revenue to reduce the penalties to 50 percent.

Look up the staff directory of the Finance Ministry, look for senior officers under their Income Tax Division.

This post has been edited by Tham: Apr 9 2018, 11:04 PM

Dear All,

Thank you for the advise and comments.

The situation had become drastic; several letter from income tax was send to her home town instead of her mailing address which she usually correspond.

She receive a letter stating the penalty had increase from 40K to 46K (6K is the interest for late payment) and an additional letter of banning her from going oversea as she had not clear the due taxes.

Ultimately she when back to the accounting firm to pursuit the matters. The accounting firm GM was dodging her calls for a weeks till she step in their office and found out they (the reception) were lying to her of the GM unavailability.

She immediately told them her intention instead of legally suing the firm; she requested them to negotiate with Income Tax to reduce the penalty, request for installment and lift up the banned.

This morning she got a called from the firm stating they are unable to assist further and that the penalty will increase every 5% per month if the amount is not clear. Was like WTF!!! is there such clause?? I unable find it in anywhere of such clause that delay payment of penalty will subject to increment of monthly penalty.

FYI; she has pull out her files from the firm and has engage with another reputable accounting firm to check. The new accountant has briefly gone thru the files and notice the declaration of both year 2014 and 2015 has the same value breakdown which is different from the supporting document.

She confronted them why such situation occur and they only answer; "I'm sorry, I did not go thru you assessment once the staff completed the tabulation. We sign off to you for you submission. Plus, you had sign the assessment paper as well so we unable help you". She was totally shock and furious on this matter as all the years of service she trusted them to handle her account well. It is very unprofessional.

Hence, right now she in dilemma on the action to be taken now.
1st, how to stop income tax from imposing further interest (the accountant inform no further negotiation will be entertain and each delay will add 5% increment of the interest)
2nd, to lift the banned immediately; she need pay 50% 1st (might or might not lift the banned)
3rd, installment only can be made after she pay 50% (subject to income tax approval)
4th, which lawyer to engage to sue the accounting firm.

If anyone have a good lawyer which she can engage; please share.

Thank you.

This was her mistake coz she trusted them since they had been doing her account for several years till recent hiccups on 2013, 2014 and 2015.
She is worrying of her 2016 assessment now......

Not sure if it is a capalang firm coz this firm is advertising everywhere in the internet, FB and papers. The company was establish since 1996.

That what she thought would happen but not so; each years submission was always last minute prepare for her and no detail discussion was done other than informing how much she need pay to income tax.

She did ask before signing if everything is correct and appropriate as she too does not want any issue with income tax or running away from taxes.

Yet 3 years shit happens....

Ini kali lah,
Change tax agent

Buy Proton get Proton quality lor....Dont expect it is a merc.

Other than her salary which was miss out; there are issues on the declaration which are only entitle of 50% or 30% claimable as inform by the income tax officer.
a. Mobile Phone claims - 30%
b. General Expenses - 50%
c. Office Expenses - 50%
d. Allowance - 50%

The accountant declare all 100% on the above stated item hence all these area was penalize as well.
She gone back and check all the other years declaration; and it was done the same at 100% by the accounting firm.

After checking with income tax website; these was enforce since 2013.

So to my questions; why the accountant know it and still did not follow the rules apply??? She confronted them and got a reply, "It's ok, if they had found out we only need to resubmit again"............F!!

I think with her having to pay such high taxes every year means her income is high also, so its not a matter she cannot afford to pay the penalty now, its a matter she not willing to pay.

So my advice is, write in to LHDN or go to their office to discuss with the director on how to settle this. Propose to pay in installments if she cannot settle full sum in one go. At least stop the interest first.

For legal side of matters, I think a bit hard to win plus stand to lose even more on legal cost. For someone earning that much, quite hard to convince the judge that you don't know anything about income tax and you signed your income tax submission without checking.