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The regulator will currently investigate over 70 registered tax practitioners who are believed to have provided false information on 106 self-managed superannuation funds to the ATO.
TPB earmarks 74 agents with dodgy SMSF tax returns
25 May 2020
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7 minute read
The Tax Practitioners Board will now follow up on an ATO SMSF compliance campaign that sought to uncover tax agents who had used an SMSF auditor number (SAN) without the authority of the auditor.
The review identified 74 tax practitioners representing 106 funds that lodged 2017 and 2018 SMSF annual returns with an incorrect, perhaps fraudulently recorded, SAN.
The ATO failed to receive satisfactory responses from the 74 practitioners and has now referred them to the TPB for further action.
Deliberate SAN misuse has been an ongoing concern for the Tax Office, with cases dating back to 2015 where tax agents charged their SMSF clients for an audit despite an audit never occurring.
TPB chair Ian Klug said the board would ensure the issues were thoroughly investigated, and apply heavy sanctions where needed.
“SMSF trustees rely on their superannuation savings to fund their retirement. The Australian government relies on regulators like the TPB, the ATO and tax practitioners to ensure that these funds are properly managed,” Mr Klug said.
“The TPB will be demanding an explanation from all 74 tax practitioners. Misconduct or failure to adequately respond to the TPB’s inquiries is a breach of the Code of Professional Conduct and may result in imposition of sanctions including suspension or termination of registration.”
Instances where an SMSF annual return has been lodged prior to an audit being finalised is understood to be “not uncommon” in the industry, in a bid to avoid late lodgement penalties.
The ATO’s COVID-19 response has included automatic lodgement deferrals for SMSF 2018–19 annual returns due on 15 May 2020 and 5 June 2020, to a new due date of 30 June 2020.
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- TPB needs to implement a FASEA type master's degree minimum standard for all accountants, and auditors. a master of laws or master of taxation should be the minimum.
even the financial planners have to sit a 3-hour national exam and have a graduate diploma.
we are now being left behind as a profession as our minimum standard is only a diploma to qualify and there are over 20,000 grandfathered accountants with not even one degree. what a shame.0- Yeah education always eradicates illegal behavior0
- Interesting review of a narrow but important SMSF audit issue. I am an SMSF auditor and to me the bigger problem is not this kind of unethical, perhaps even criminal behaviour but rather the tied relationship between accountant and SMSF trustee. We had an accounting firm take all their SMSF audits off us because their constant and ongoing failure to respond to our information requests meant we were forced to keep issuing 35C notices. Despite the accountants knowing full well our audits (once we had the information we needed) were always turned around quickly, were very thorough and carefully done they shifted their audits to another firm who we know will not “rock the boat” and will not issue 35C notices. This is not how SMSF auditing should work. This firm’s SMSF clients likely have no idea why they changed auditors. I wonder if they did know (we have an email trail establishing the facts of all this) what they would think! One of the biggest problems facing the SMSF audit space is not criminal behaviour but the lack of independence that can arise because accountants control the allocation of SMSF audits.0
- Not giving any excuses for dodgy behaviour, but controlling the allocation does help streamline the workflow. I shudder to think how it would be dealing with hundreds of auditors.0
- That is very true and unfortunately a perceived key factor in SMSF audit efficiency. My counter argument to this is that as SMSF auditing goes increasingly online, preparing an SMSF for audit is in many respects becoming a simple generic process of uploading documents. A lot of SMSF auditors run systems for accountants where all SMSF audit workpapers can be uploaded in a single ZIP file. From there it is a standard SMSF audit and the emailing back of the audit report. The problem is that we all know it is much easier to find oversight and errors when checking someone else’s work than your own. An SMSF audit often ends up doing just that and more than a few accountants hate it. As a result, there is a lot of pressure, if the accountant controls the audit allocation process, not to upset the accountant. This is the fundamental independence flaw in the SMSF audit system.0
- A reasonable argument on the assumption everyone is asking for precisely the same things in the same format. Otherwise, I simply don't have the time or inclination to adjust.0
- We can only hope the TPB does something if experience is anything to go by then they will sit on the side lines.0
- About time.
I had a nearby Tax Agent who put my name as the auditor on their clients SMSF returns about ten years ago and the clients thought they were paying for audits to be completed. The Tax Agent Board responded to my complaint but suggested it may not be worthwhile chasing it up (time involved by all and limited repercussions to the agent); the CPAs did though.0- And these guys are the so-called "trusted advisers" that many in the trade want to give advice exemptions to....unbelievable...0
- I see you Jimmy!0
