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Auditing, Documentation

Trustees have SAN misuse duty

SMSF trustees have been reminded by the ATO it is their responsibility to ensure their fund has not fallen foul of tax agents misusing SMSF auditor numbers.

The ATO has stipulated SMSF trustees have a responsibility to ensure their fund has not been victim to the misuse of SMSF auditor numbers (SAN) being perpetrated by some service providers in the sector.

“An important message I have for SMSF trustees is remember it’s your responsibility to make sure your SMSF has had its independent audit completed prior to the lodgement of your SMSF annual return,” ATO SMSF segment acting assistant commissioner Stephen Keating said during the recent 2020 SMSF Trustee Empowerment Day hosted by smstrusteenews.

“You must validate with your tax agent that the details they are reporting on your behalf are true and accurate, so make sure you ask for a copy of the auditor’s report before you lodge.”

If the tax agent fails to produce a copy of the auditor’s report, Keating advised trustees to refrain from lodging the return in question.

“My advice to them is they need to talk to the auditor who has been reported on their return and actually site the report themselves,” he said.

According to Keating, the ATO will welcome trustee assistance in eradicating the issue of SAN misuse.

“If the tax agent has falsely reported that the audit has been done, then we would certainly welcome any referral from that trustee about that tax agent’s behaviour and then we’ll take it from there,” he revealed.

The ATO’s mail-out of the 2018 annual returns to registered SMSF auditors resulted in 107 confirming their SANs were misused on 832 occasions involving 230 tax agents.

When the same exercise was performed using the 2017 annual returns, 420 auditors confirmed their details had been misused on 1445 occasions, with 626 tax agents discovered to have been perpetrating this breach of the law.

To date, the Tax Practitioners Board has terminated the registration of four tax agents as a result of SAN misuse.

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