The regulator said the recent decision from the Administrative Appeals Tribunal (AAT) affirmed its decision in WZWK and Commissioner of Taxation (Taxation) [2023] AATA 872 (26 April 2023) to amend tax assessments, impose tax shortfall penalties and disqualify a trustee following an ATO audit.
The trustee, who was the sole member of the SMSF, was also a Chartered Accountant and an approved SMSF auditor.
“Our audit found the trustee was breaching the payment standards by illegally making payments from the SMSF to himself as a member which did not meet a condition of release,” the ATO stated.
“Consequently, we amended the member’s 2015 and 2016 personal income tax assessments to include these payments in their assessable income. This resulted in them owing around $413,000 in additional tax and over $179,000 in tax shortfall penalties because they had made false and misleading statements in their income tax returns.”
Following the ATO’s audit it referred the trustee to ASIC, which then disqualified them as an approved SMSF auditor.
The trustee was also referred to the Tax Practitioners Board (TPB) which terminated their tax agent registration.
“We take non-compliance seriously and will continue to hold tax professionals to a higher standard when it comes to complying with income tax and super laws when managing an SMSF,” the ATO stated.
