SAN misuse action having effect

SAN misuse action

Positive results are materialising from the ATO mail-outs to auditors and trustees as a means of addressing instances of SMSF auditor number misuse.

The ATO’s mail-out procedure designed to address SMSF auditor number (SAN) misuse has yielded noticeable positive results in the sector.

“For the last three years we’ve invested heavily in identifying instances of SMSF annual returns being lodged where an auditor’s details have been entered incorrectly or an audit has not been undertaken,” ATO SMSF approved auditor portfolio director Paul Delahunty said during his presentation at the SMSF Auditors Association of Australia Conference held in Melbourne recently.

“This has involved the important assistance from auditors who have responded to the ATO mail-out of a list of funds that have quoted their auditor number.

“As a consequence of this partnership we have noticed a significant positive shift in the behaviour of tax agents and trustees in lodging annual returns with the correct SAN quoted.

“This has also been supported by action taken by the Tax Practitioners Board following ATO referrals and we note the recent decision by the AAT (Administrative Appeals Tribunal) to uphold the three-month suspension of a tax agent [responsible] for 20 returns with details of audits that had not been done.”

The regulator’s SAN mail-out activity for the 2020 income year was mailed out in September 2021 with a reminder email recently sent to auditors who were yet to respond. The ATO is expecting to receive replies for 70 per cent of auditors who received the annual return list by the end of April.

To date, about 1300 instances of potential SAN misuse have been identified for the 2020 financial year as a result of direct “dob-ins” from practitioners and compliance action will be taken regarding these cases shortly, Delahunty said.

“This work, in terms of following up with those tax agents and trustees, is expected to commence in May of this year and once again will enable us to deliver important results to maintain the integrity of the system,” he said.

During the same presentation, he confirmed enforcement of auditor independence will be a high priority for the ATO this year.

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