A specialist auditor has called for appropriately harsh punishment to be brought upon tax agents who are found to have deliberately and illegally misused SMSF auditor numbers (SAN).
Elite Super managing director Katrina Fletcher, who has had her SAN used illegally, is fearful situations like her own will not carry a sufficient enough penalty to deter others from perpetrating the same offence.
Fletcher said she fears this might happen if these illegal practices end up falling under the scrutiny of two separate industry bodies, being the ATO and Tax Practitioners Board.
“Is it out of the ATO’s hands if they send the case to the Tax Practitioners Board and the Tax Practitioners Board says ‘we’ll just give them a $500 fine and tell them don’t do it again’,” she told selfmanagedsuper.
She suggested the same severity be applied to these circumstances as with SMSF auditors found to be in breach of their professional responsibilities.
“If we do the wrong thing as auditors, we’re referred to ASIC (Australian Securities and Investments Commission), taken off the register and reported in the media,” she said.
Similarly, she recommended if a tax agent is found guilty of deliberately misusing a SAN, the charge and penalty should be announced to the greater public.
“[It’s important] the outcome is made public. [The message should be] ‘this is what you get if you do this with an auditor’s signature and number’,” she said.
The regulator has revealed it has identified one definite instance of illegal use of a SAN it considered criminal, with two other likely to be classified in a similar manner.
In addition, the ATO said it had found 15 per cent of SAN misuse to be deliberate.
“It would be good if the ATO got to the bottom of some of those and hopefully they’re already onto the worst cases,” Fetcher said.
According to Fletcher, the ATO said it was encountering an increasing number of cases where tax agents are knowingly using SANs illegally.