The mailout helps the ATO verify that funds are being audited, and identify instances of SAN details being incorrectly or fraudulently reported on SMSF annual returns (SARs).

“Misused SANs may result in reportable contraventions not being flagged, and potential reputational risk from your details being fraudulently used for SMSF audits,” the ATO stated.

Where the misuse was inadvertent, the ATO said it will request the tax agent or trustee to rectify the mistake.

Where the misuse of the number was deliberate, the ATO said it will take compliance action against the trustee or refer the tax agent to the Tax Practitioners Board.

The ATO reported in May this year that from the mailout conducted in 2021, auditors reported 1,896 instances of SAN misuse with 1,230 instances relating to SARs for the 2020 income year and 481 instances relating to SARs for the 2019 income year.

Out of the tax agents linked to SAN misuse, 411 were connected to one instance of SAN misuse, while 50 tax agents were connected to more than five instances of SAN misuse involving 812 funds.

The ATO previously warned that it takes SAN misuse seriously and that where a tax agent is found to have misreported SANs across multiple funds or multiple years, it may refer them to the Tax Practitioners Board or for criminal prosecution.