In the app, go into Gear Icon → System → About My System. It will tell you what format is being played by any speaker playing.

Couple things to double check:

1. In the Apple TV Settings under Video and Audio → Audio Format, make sure that the Change Format is “off” (not Dolby Digital!) and that the Dolby Atmos toggle right below it is set to “on”. Example.
2. You have to be playing Apple Music from the Apple TV. The Sonos App unfortunately uses a low-end version of Apple Music. No Atmos or even lossless. Whenever you post about playing something for testing, please include the device on which you are playing it.

With the Apple TV it will definitely not work. The Apple TV uses Dolby MAT for Atmos and therefore requires an eARC port on the TV for Atmos playback. OP is best off to test with the TV apps but given the age of the TV I doubt it supports Atmos. 

Or try it with another streamer: Roku, Fire TV, etc

This is incorrect. I have an Apple TV. If I turn off eARC on my TV, Sonos app displays Dolby Atmos (DD+).
 

If anything, eARC Dolby MAT has a long-running compatibility problem with Sonos Arc. If you use eARC with Apple TV, consider turning off Atmos as Sonos advised me and I have done. You can read all about that here.

Interesting, it doesn’t work for me, maybe that’s a feature on the newest Apple TV? I also don’t have any pop sound issues described in the thread, but I’m using the 5th gen Apple TV. 

I use a 2021 Apple TV 4K, AKA 2nd gen 4K. 

In the majority of cases, Apple TV 4K requires an eARC connection for Atmos, however, there are a few televisions (some LG and Samsung TVs that I have read about) which can convert the Dolby MAT output from Apple TV into Dolby Atmos (DD+) to work over HDMI ARC.

Never had any issue using Apple TV with eARC enabled on my LG C1. I did experience a couple of pops using an older Samsung TV with a One connect box, which was resolved with an HDFury Arcana. This was before I even had the Apple TV.

My TV is a Sony 900H. It is possible that it’s the TV converting to DD+. It’s not obvious to me how I could check for that. 

@ProUSAConstitution . I did read your post that said you had found an episode of Jack Ryan with a little marker to indicate it was in Dolby Atmos. Did you read the posts from @Ken_Griffiths  and from me indicating that what you took to be an indication of Atmos was possibly not that? Does your "little marker" include the words "Dolby Atmos" in full? If so then you have an Atmos source.

Would you buy the Soundbar again knowing what you know now?

What would you buy instead?

Is Atmos far better sounding, more channel separation, surround, something?

not psyched about spending another $330 to get the Soundbar to work!

I would certainly buy the Arc again, although not particularly for Atmos. 

What the Arc does is entirely in line with my expectations. What I know now is pretty much the same as I knew when I bought it.

I would only expect decent surround sound, with or without Atmos, with the addition of rear speakers.  My experience is that these make a big difference (although that depends on the nature of the film).

Ho hum. The Arc works fine. You would be spending the money to overcome the limitations of your TV.

I live in hope that eventually this will sink in.

I wouldn’t buy it again because I haven’t been able to turn Atmos on for my Apple TV and Xbox in about two years. Once you get the pop, Sonos recommends you turn off Atmos since it will just reoccur within about 30 minutes.

Sonos Arc sounded good for the short while I could use Atmos. If Sonos fixes the problem, I would go back to enjoying it. But at the moment, with the problem having been going on for years, I would not recommend Sonos to anyone who wants to use Apple TV or Xbox. 

I would buy the Arc again too. It has always worked fine with my old LG C9 TV and Nvidia Shield - so I’m happy. It sounds great in our Living Room. I added surrounds and Sub (in that order) but I maybe should have perhaps got the Sub first as that (for me, at least) made a huge difference when watching action movies, or listening to music.

The other thing is it fits in really well with the TV and of course there’s the multi-room wireless functionality with our other Sonos devices around the Home. There’s just no way I would have been happy with any other brand of soundbar. It’s integration with our other speakers is the one thing I would really miss.  

Ok I got the older version, so the 1st gen 4k, but as other mentioned this might also be a limitation from my TV. Or not really a limitation since I have no issues with a pop sounds luckily.

I would also buy the Arc again, but not really because of Atmos. In the end it’s a soundbar which tries to achieve some kind of Atmos sounds with tricks, it will never reach the quality of a real Atmos setup. So don’t expect too much of it, in most rooms it’ll probably not even work properly.