Case study: How we saved one client $600,000

Over the years we’ve had a number of clients face ATO penalties for Self-Managed Super Fund related issues and have been able to work successfully with the ATO to remit the penalties. In a recent case, a client of ours (who managed their own SMSF) had fallen on hard personal times, which led them to borrow money from their SMSF over a few years in breach of the superannuation rules.

We encouraged them to repay the money, which they did, however, the fund auditor (as per their requirements) reported the breach to the ATO after the annual audit. This triggered the ATO to commence an audit of the SMSF, which resulted in personal penalties of $1.2M. The fine was imposed personally and could not be paid from the SMSF. The ATO initially remitted the fine down to around $600K, but they still faced the prospect of having to sell their family home to pay the remainder of the penalty.

On behalf of our client and together with specialist lawyers, we prepared a detailed written request for the remission of the remaining penalties, which the ATO agreed to. Additionally, the client had Audit Shield tax audit insurance in place, which covered most of the professional fees in relation to the ATO audit.

We continually have positive experiences working with the ATO, even at times when the situation can be overwhelming for the client. Over the past two years, we have saved clients over $1.5 million in ATO penalties and interest, which goes to show the ATO are understanding and willing to create positive outcomes for both parties when approached in the right manner.