New detection strategy uncovers increased SAN misuse
The ATO has linked over 400 tax agents to multiple instances of SMSF auditor number misuse in its latest mailout.
In an online update, the ATO explained that a new strategy adopted with its mailout for SMSF auditor number (SAN) misuse in September has resulted in higher rates of SMSF auditor number misuse being detected.
“As part of our new strategy, in September 2021, we issued each auditor with a list of SMSFs that lodged an SMSF annual return (SARs) for any income year that reported them as an auditor with an audit completed date between 1 July 2020 to 30 June 2021,” the ATO stated.
“As a result, we detected more SAN misuse than in previous mailouts with more than a third of instances of SAN misuse relating to SARs that were lodged late.”
The most recent data released by the ATO shows that auditors have reported 1,896 instances of SAN misuse from the latest mailout, with 1,230 instances relating to SARs for the 2020 income year and 481 instances relating to SARs for the 2019 income year.
The ATO stated that SAN misuse was connected to 683 tax agents and 24 trustees.
Out of the tax agents linked to SAN misuse, 411 were connected to one instance of SAN misuse, while 50 tax agents were connected to more than five instances of SAN misuse involving 812 funds.
The ATO warned that it takes SAN misuse seriously and that where a tax agent is found to have misreported SANs across multiple funds or multiple years, it may refer them to the Tax Practitioners Board or for criminal prosecution.
The ATO previously reported that there were 1,315 instances where funds did not correctly report the auditor number on their return for the 2019 income year.
In 2021, a Perth-based tax agent had his registration terminated after he lodged 125 self-managed superannuation fund annual returns before audits were completed.
The 125 SMSF annual returns were lodged over a nine-year period, under certificates that falsely stated that the funds had been audited prior to lodgement, and dishonestly included the name of the auditor and the date of the audit.
The TPB, which was referred to the issue by the ATO in 2019, also found that eight funds had not been audited for 10 years or more.
ATO assistant commissioner, SMSF regulatory branch, Justin Micale previously stated that in the last three years, the ATO had invested heavily in identifying instances of SMSF returns being lodged where auditor details have been entered incorrectly or the audit has not been undertaken.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.