The ATO has encouraged SMSF trustees to voluntarily disclose regulatory contraventions as soon as possible with a plan to rectify any problems as any unwillingness to engage will be viewed negatively by the regulator.
In a website update, the ATO advised SMSF trustees to provide all relevant facts and supporting documentation related to a contravention and a rectification proposal or proposed enforceable undertaking.
Where a trustee is unable to develop a rectification proposal before accessing the SMSF early engagement and voluntary disclosure service, that should also be disclosed to the ATO at the outset of the process.
“If you voluntarily disclose unrectified contraventions before we start an audit, we take your disclosure into account in determining what other actions we need to take,” it said via the ATO website.
SMSF trustees and professionals using the disclosure service can expect the ATO to contact them in an attempt to agree on a plan to rectify the contravention and this level of engagement will be a factor in determining further action.
“[You can expect us to] take your voluntary disclosure and your willingness to engage with us at an early stage and throughout the review process into account when determining the level of enforcement action that is required and making a decision about the remission of any administrative penalties that may be applicable,” it said.
It added that where an SMSF professional, such as a tax agent, accountant, financial planner, lawyer or fund administrator, acts on behalf of an SMSF trustee in making a voluntary disclosure, the latter must be approved by at least one of the trustees of the fund.
The professional must also be registered with the ATO as an authorised contact for the fund, otherwise a written authorisation signed by the trustee must be provided.
SMSF auditors were also informed they are still required to report any regulatory contraventions via an auditor/actuary contravention report, but the regulator will not commence an audit based on such a report if the issue is being resolved through voluntary disclosure or additional information comes to light.
