An unregistered tax agent could face fines or imprisonment if she doesn’t comply with a Federal Court order directing her to stop lodging tax returns on behalf of her clients, as the TPB ramps up investigations into unregistered tax advice.
Federal Court imposes order on unregistered agent
Federal Court Justice McKerracher last week ordered unregistered tax agent Jessa Van Stroe, a.k.a. Jessa Layola, from preparing or lodging tax returns on behalf of her clients while not a registered tax agent with the Tax Practitioners Board, until the Board’s appeal for penalties is heard.
The Court heard that, if Ms Van Stroe continues offering tax services, she will expose herself to potential fines, imprisonment, and the seizure of property for contempt of court.
The case made its way to the Federal Court after a TPB investigation leveraging taxpayer data found Ms Van Stroe had illegally charged fees in exchange for tax advice services.
TPB chair Ian Klug said Ms Van Stroe’s behaviour was “reprehensible”, and damaged the reputation of the tax profession.
“Ms Van Stroe’s behaviour is reprehensible. She has put taxpayers at risk for her own benefit by exposing them to penalties and unpaid taxes which they would be liable to repay,” Mr Klug said.
“The TPB will continue to focus on unregistered preparers who undermine confidence in the services and reputation of the tax profession.
“These preparers will be targeted and stopped from acting unlawfully.
“This behavior will not be tolerated and the TPB will work with partner agencies to pursue criminal prosecution of unregistered preparers where there’s a suspicion of fraud.”
Ms Van Stroe’s court appearance is the latest in a series of high-profile takedowns launched by the TPB as part of its crackdown on unregistered tax return preparers.
As recently as last month, the Federal Court sentenced Kent Scott Hacker to seven months in jail for continuing to direct clients to lodge returns through their myGov accounts even after a court injunction restrained him from doing so.
It was the most recent in a string of sentences levelled against Mr Hacker, who was jailed in December 2020 for seven and a half months, and fined $640,000 after being found to have unlawfully provided tax and BAS agent services for a fee or reward while not being registered with the TPB.
The court also imposed permanent injunctions against Mr Hacker and his related entities, which include OSGS and Naleview Pty Limited, from the further administration of unregistered tax agent services.
At the time, Mr Klug said he hoped Mr Hacker’s conviction would serve as a warning shot to those doing the same.
“The TPB hopes this serves as a deterrent to other unregistered preparers who believe they can operate outside of the law and take payment for tax agent services without TPB registration,” he said.
“The TPB will continue to pursue unregistered preparers like Mr Hacker with the utmost force of the law in order to protect the integrity of the taxation system.”
Mr Hacker’s run-in with the TPB wasn’t dissimilar to that of former tax agent, Nathan Williams, who is currently before the Federal Court, too.
He was found to have continued operating as a tax agent – after the TPB scrapped his tax agent registration in 2018 – by lodging returns on behalf of clients by using their myGov accounts.
Information provided by the ATO alleges that Mr Williams would ask his clients for their myGov password and access code before accessing their account to lodge their tax return.
The Federal Court in July issued an interim injunction in the proceedings, preventing Mr Williams from lodging any further tax returns, while facing the risk of imprisonment if he breaches the terms of the order.
TPB chair Mr Klug said the regulator would continue its crackdown on unregistered preparers this tax time after receiving over 200 complaints last year.
“The case of Nathan Williams highlights the issue that dealing with an unregistered preparer this tax time can cost you thousands of dollars in bills and penalties and can put your personal and financial information at risk,” Mr Klug said.
“We know that taxpayers place a lot of trust in tax agents, but we’d warn people to remember the adage that sugar and salt can look the same.
“Just because someone offers to deliver a large tax refund or has been recommended to you by a friend or colleague doesn’t mean that the person will deliver a competent and legal service.
“If anyone asks for your myGov details, it should raise an immediate red flag.”