In the coming months the ATO will be increasing its activity against the most serious and common compliance breach, being SMSFs with significant balances that have continually failed to lodge an annual return.
According to ATO superannuation director Howard Dickinson, the regulator is currently progressing 535 cases involving SMSFs with high asset balances that have not lodged an annual return for several years, with many funds facing non-complying status as well as trustee disqualification.
In addition to these actions, Dickinson revealed to delegates at the recent Chartered Accountants Australia and New Zealand National SMSF Conference in Sydney that more funds will be facing significant scrutiny.
“We’re about to commence a letter out to 450 other clients in the next week or so, letting them know they are also on our radar and they’re also in our high-risk pool,” he explained.
“Another 450 are planned shortly after [and] there are more to come but at this stage that’s our plan.
“These letters are the last chance for higher-value active funds, and they are only going to them, to take action to self-rectify, to report, to lodge and engage us before we commence the ultimate sanctions of disqualification and non-compliance, with the resultant tax outcome that you all know well of half the funds’ assets transferring to the government’s coffers.
“If I leave you with nothing else today it is to say this is a call to action for you and your clients. Let’s get these people in the system or out of the system. “This is about the integrity of the sector. Non-reporting funds are not being audited and not being regulated – they’re wild cards.”