The Tax Office has reported that a trustee of an SMSF was recently sentenced to 6 months imprisonment, serving a minimum of 14 days, after pleading guilty to dishonestly contravening a civil penalty provision of the SIS Act.
In its latest SMSF News (Edition 25), the Tax Office said the SMSF trustee had withdrawn almost 100% of the fund’s assets without satisfying a condition of release in Sch 1 to the SIS Regulations. According to the Tax Office, the trustee was clearly warned by their accountant that they could not do this but continued to withdraw money from their super fund. The withdrawal of this money was reported by the SMSF as a loan to “associated persons”. However, there was no written loan agreement and it was determined by the Tax Office that the whole of this amount constituted illegal early access to preserved super benefits.
In another recent case, the Tax Office said it prosecuted an SMSF approved auditor for failing to work with the Tax Office by not returning phone messages or responding to an audit notification. According to the ATO, the approved auditor had failed to report an investment in a related trust by an SMSF in breach of the in-house asset rules. The Tax Office says it eventually issued the auditor with a notice under s 255 of the SIS Act asking for audit documentation which the auditor failed to appropriately respond to. The auditor pleaded guilty and was convicted and fined id=”mce_marker”,200, the Tax Office said.
[LTN 38, 26/2/13]