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The Tax Office will now provide all SMSF auditors with a list of funds that reported their auditor numbers on annual returns in a bid to weed out tax agents and trustees who have misused such numbers.
SMSF auditors will now be provided a list of funds that reported their SMSF auditor numbers (SANs) on SMSF annual returns (SARs) for the 2017 income year.
Auditors can expect to receive these lists by email in one of three scheduled mail outs planned for March, April and May.
The ATO’s latest move comes as the agency notes that SANs are being continually misused by the tax agent community for the purpose of skirting annual obligations.
The Tax Office’s research shows that in about 85 per cent of cases, this is down to administrative or “genuine” errors.
However, in about 15 per cent of cases, it’s clear the numbers are being used where an audit simply hasn’t and won’t take place.
Typically, auditor numbers are misquoted by a tax agent, and so far six agents have been referred to the Tax Practitioners Board (TPB).
Where misuse is identified, the ATO can impose penalties, disqualify trustees, and refer tax agents involved to the TPB or refer them for prosecution.
Last year, the ATO singled out 100 funds for using a SAN on an annual return without the auditor’s authority.
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