The ATO will soon start sending SMSF auditors lists of the SMSF Annual Returns lodged using their SMSF Auditor Number, to tackle misuse of the numbers.
SMSF Auditor Numbers (SAN) are used to identify registered SMSF auditors on SMSF Annual Returns. But they can also be misused. The ATO has 100 SMSFs under investigation for potential misuse of SMSF auditor numbers.
For some time the ATO has been concerned that Annual Returns may be lodged including an SMSF Auditor Number when no audit has been conducted. The ATO has found cases where a discrepancy in SANs was the result of a data entry error.
“We’re concerned that some trustees are quoting incorrect SANs, either in genuine error or in an attempt to conceal that an audit hasn’t been completed,” said ATO Assistant Commissioner for Superannuation Dana Fleming at the recent SMSF Association National Conference.
The ATO currently has 100 SMSFs, across 22 tax agents, under investigation.
“Of the 40% of cases completed, we’ve found approximately 85% were inadvertent errors; but the remaining 15% were deliberate misuse.”
These cases of deliberate SAN misuse were referred to the Tax Practitioners Board. Where misuse is the result of a genuine mistake, the ATO works with the SMSF trustee or tax agent to lodge an amended return.
“We’ve identified another 231 cases for review,” said Fleming.
The ATO has been sending lists of SMSF lodgements to SMSF auditors who request them, so they can cross check with their own records. So far this financial year 93 such lists have been sent.
“However, we recognise that this is not enough,” Fleming said.
“In response to feedback, I’m pleased to announce that at the end of this quarter we will, in three waves, share with our SMSF auditor population the list of funds that have quoted their SAN for the 2017 financial year so they can check for misreporting or misuse.”
The first lists will be emailed in March, followed by more in April and then May.
The ATO will continue sending these lists in future years.