The ATO is preparing to implement a process for SMSF trustees and professionals to report and resolve compliance issues, called the ‘SMSF early engagement and voluntary disclosure service’.
“In response to feedback we received from SMSF trustees and advisers, we are developing an early engagement and voluntary disclosure service, so you can be put in contact with people in the ATO who can help you with complex SMSF issues, and where appropriate, to help you rectify SMSF regulatory breaches,” says the ATO.
Currently there can be significant delays between SMSF trustees and professionals becoming aware that a contravention has occurred and when it is reported to the ATO as part of the annual SMSF audit process. Even more time would pass before the ATO responds to the report – by which time the contravention may have already been resolved.
Under the early engagement and voluntary disclosure service the ATO will engage with SMSF trustees and professional to “agree on a proposed plan for rectifying the disclosed breach”.
The ATO will take this early and voluntary disclosure into account for determining enforcement action and the potential remission of administrative penalties.
The ATO expects the trustees/professional to devise and submit a plan to rectify the contravention, implement measures to reduce the likelihood of similar breaches in the future, amend any SMSF and individual tax returns as required and bring lodgements up to date.
The early engagement and voluntary disclosure service will work alongside the existing Auditor Contravention Report (ACR) process. The ATO says an “audit based on ACR won’t commence if issue resolved via voluntary disclosure unless additional information warrants further investigation”.