The ATO has announced it will be taking enforcement action against SMSF practitioners who remain non-compliant in regards to their obligations as trustees despite previously being instructed by the regulator to do so.
Specifically, the action will be taken against the tax agents and auditors who have failed to lodge their SMSF annual return (SAR).
“Lodgement of a SAR helps us to see if trustees have been compliant with their regulatory and tax obligations. Where a trustee is also a tax agent or auditor, we expect them to have a thorough understanding of their obligations and as a result we have higher compliance expectations,” the ATO said.
“We contact every trustee of an SMSF who does not lodge their SAR to encourage them to take immediate action. If we do not receive a response, we will issue a warning on the potential consequences of continued non-lodgement.”
To this end, the regulator targeted 573 funds where at least one trustee was either an auditor or a tax agent and issued them with a final warning letter urging the trustees to lodge the fund’s annual return.
The correspondence stipulated if the outstanding annual returns were not lodged, the ATO could disqualify the trustee or take other enforcement action.
Subsequent to these letters being sent out, 356 SMSFs involving a total of 702 trustees are still yet to lodge their outstanding annual returns.
“We will shortly be contacting those trustees who have ignored our final warnings to begin compliance action where appropriate,” the ATO stated.
The correspondence forms part of the regulator’s “three strikes and you’re out” policy.
Following the implementation of this enforcement method, the ATO in November last year highlighted its growing concerns over the non-compliance of trustees who were industry professionals.
“Do not wait for us to send you the final warning to lodge. If you have received any correspondence from us reminding you to lodge, you should lodge any outstanding returns as soon as possible,” it advised.
