In an online update, the ATO said that it will soon be writing to tax agents and approved SMSF auditors who are trustees of their own SMSF and have failed to lodge their SMSF annual return for one or more years.
“While it is a fundamental requirement that all SMSF trustees meet their lodgment obligations, we have a higher expectation of tax agents and SMSF auditors, given their professional standing in the community,” the ATO said.
The ATO reminded SMSF professionals that failure to meet lodgment obligations is a serious regulatory contravention that will result in enforcement action against the SMSF and the trustee.
“Our enforcement action may include applying a penalty for failure to lodge on time, issuing a notice of non-compliance, raising default assessments for each year of non-lodgment to estimate tax payable and charging penalties of up to 75 per cent,” the ATO said.
The trustee may also be disqualified, the ATO added, so that they can no longer act as a trustee of the SMSF or any other SMSF.
“Being a disqualified trustee may prevent a tax agent or an approved SMSF auditor from meeting the fit and proper legislative requirements for these professions,” the ATO warned.
“This could result in a referral to ASIC or the Tax Practitioners Board taking action regarding their ongoing registration.”
Speaking at the SMSF Summit, ATO assistant commissioner Dana Fleming said that the ATO would be dealing with around 39,000 SMSFs in relation to non-lodgment issues.
The ATO undertook a review of persistent non-lodgers last year, identifying around 49,000 funds who had two or more years of outstanding returns.
“By July this year, we had worked with them and about 45 per cent had either gotten back on track or have worked with us to exit the system because they felt the vehicle is no longer appropriate for them,” Ms Fleming said.
“We are continuing our focus for this financial year. We have a 39,000 population of non-lodgers to focus on which represents $15.5 billion assets under management.”