The 125 SMSF annual returns were lodged over a nine-year period, under certificates that falsely stated that the funds had been audited prior to lodgement, and dishonestly included the name of the auditor and the date of the audit.

The TPB, who were referred to the issue by the ATO in 2019, also found that eight funds had not been audited for 10 years or more.

In his defence, Mr Cross argued that the sole motivation for making the false declarations was to avoid late lodgements and to “avoid penalties being incurred by the clients and adverse consequences on future lodgement dates and the regulated status of the funds”.

He told the tribunal that subsequent audits of the funds had confirmed that the funds had “complied with the relevant superannuation legislation and regulations”, and that the only incorrect information in the returns were the incorrect audit dates.

The tribunal found that regardless of his motivation, “Mr Cross had repeatedly and deliberately chosen to put what he perceived to be the interests of his clients, above his fundamental professional duty to act honestly. He repeatedly, deliberately chose to mislead the ATO.”

AAT deputy president Stephen Boyle took a dim view of Mr Cross’ contentions, noting that he deliberately chose to mislead the ATO over nine years, and had only stopped doing so after he was caught by the Tax Office.

“This was not a clerical error where a wrong date was inserted; it was a calculated misrepresentation that the audit had been completed and false declarations on 125 occasions,” Mr Boyle said.

“These misrepresentations and false declarations were made in the full knowledge of the legal significance of the need for audits to be completed prior to lodgement of the returns and the legal consequences that flow if they are not.”

Mr Boyle also stated that he was unconvinced about Mr Cross’ acceptance of his conduct, noting that Mr Cross had repeatedly downplayed the gravity of making false declarations by asserting that the only error was to lodge with an incorrect audit date.

“This was not a case of a momentary lapse of judgement; this was a deliberate choice made on 125 occasions over a nine-year period and it appears that this dishonesty only stopped because the deception and the making of the false declarations was discovered by the ATO,” Mr Boyle said.

“The issue was not that he had lodged returns out of time (now supposedly addressed by appointing new auditors) or been sloppy in completing the returns with an incorrect audit date; the issue was that he had deliberately misled the ATO as to the completion of the audits of the funds and made false declarations.”

Chair of the TPB, Mr Ian Klug AM, reminded tax practitioners that there were serious consequences for failing to act honestly and with integrity and that such behaviour invariably calls into question whether a practitioner meets the fit and proper person requirement.

“The terminations imposed reflect the gravity of Mr Cross’ and the partnership’s dishonest conduct in lodging SMSF annual returns with false declarations over such a prolonged period,” Mr Klug said.

Ten tax practitioners have now been terminated as a result of false declarations in SMSF annual returns. The TPB has also suspended the registration of four other tax practitioners.

As a result of recent ATO referrals, more than 60 tax practitioners are now subject to TPB enquiries regarding SMSF auditor number misuse.

The TPB’s compliance action also links in with a broader ATO lodgement campaign targeting persistently disengaged SMSF trustees, of which more than 1,100 are estimated to be tax practitioners. The TPB and the ATO will collaborate to address the risks in respect to the tax practitioners in this group.

The deliberate misuse of SMSF auditor numbers had been identified as an ongoing area of concern with the ATO and the TPB, with 74 tax practitioners singled out last year over such misuse.

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.