The ATO has recorded the highest level of responses from auditors in regards to questions about SMSF auditor number (SAN) misuse, but noted overall misuse occurred in less than 1 per cent of the SMSF population.
ATO figures supplied to selfmanagedsuper show 4700 auditors were sent a letter in September 2020 in regard to SAN misuse and of that number, 3225 responses were received, representing a 68 per cent response rate.
The regulator also found 353 responses reported SAN misuse in relation to 1327 funds that lodged an SMSF annual return (SAR) for 2019 and, overall, 294,171 funds lodged a 2019 SAR that reported the correct auditor.
It added the 1327 instances where an auditor reported that they did not audit a fund’s 2019 SAR were connected to 594 tax agents and 17 trustees who prepared their own SARs.
“We expect a large percentage of these will involve inadvertent reporting commonly caused by auditor prefill details rolling over into the 2019 return and not being checked and updated correctly when there is a new auditor appointed,” the ATO told selfmanagedsuper.
It also noted those SMSFs flagged for SAN misuse in their SAR accounted for less than 1 per cent of the population of funds covered by the auditor mailout and the regulator would be following up on each report of misuse.
Yesterday, the ATO described the response rate as the “most successful mailout to approved SMSF auditors and their responses have allowed us to identify tax professionals who have submitted SARs possibly quoting incorrect SANs”.
“These tax professionals will shortly receive an email from us requesting that they review the SAR for the 2018/19 year for the identified fund to ensure the auditor details provided are correct,” it said.
“We are also contacting some trustees who have self-prepared returns and who have been identified as using incorrect SANs on their returns.”
