Lawyer, ATO outline keys to penalty remission
An industry lawyer and ATO assistant commissioner have outlined how professionals should approach penalty remission with their SMSF trustee clients and how best to deal with ATO disputes.
Speaking at the Chartered Accountants Australia and New Zealand National SMSF Conference last week, ATO assistant commissioner for superannuation Matthew Bambrick stressed the importance of engaging with the ATO early in the penalty remission process.
“Talk to us before we find it, you’ll always get a better results then. Particularly if you come to us with how you’re going to rectify it, with a plan. We usually say yes to that kind of thing. So if you’ve got a plan, tell us,” Mr Bambrick said.
Cooper Grace Ward partner Scott Hay-Bartlem also stressed the importance of early interaction with the ATO, saying it can reduce cost and lead to early resolution.
“Start working on the issue before the ATO has made up its mind… start the process early, engage early, it’s much harder to undo a notice of non-compliance than to explain what actually happened,” he said.
Presenting a plan that indicates the contravention won’t be reoccurring will also be valuable, Mr Bambrick suggested.
“Show there’s now systems and processes in place to ensure it won’t happen again,” he said.
Mr Bambrick also said proving a history of compliance for a trustee is key to the remission process.
“This might be the first time [a contravention] has happened, or they’ve ever had a problem with their tax or super. It’s a one-off mistake. However, carelessness is not a mistake. You actually have to show you tried.”
When preparing an objection, Mr Hay-Bartlem said it’s important to ensure get trustee’s story straight, and be wary of what is put in writing to the ATO.
“Make sure you’ve got evidence of your claims, get your documents ready, back it all up, get your story right,” he said.
Mr Hay-Bartlem also suggested presenting alternative arguments to the ATO, saying “you never know what you’re going to come up on.”