The Tax Practitioners Board (TPB) welcomed the recent judgment of the Federal court addressing misconduct by Perth based Ms Jessa Dabalos (also known as Jessa Van Stroe and Jessa Layola). Ms Dabalos was sentenced to 12 months' imprisonment for criminality and contempt of court, for acting as an unregistered preparer in breach of a permanent injunction ordered by the Court.
TPB Chair, Peter de Cure, AM, noted ‘this case is part of a broader strategy to deter unregistered preparers who may exploit their clients and the tax system.’
Ms Dabalos prepared and lodged tax returns while not registered with the TPB and provided bad tax advice to hundreds of clients, mainly based in Western Australia. In previous decisions, the Court found 531 breaches of the Tax Agent Services Act 2009, imposed a $230,000 penalty and a permanent injunction to prevent further misconduct. Despite these significant sanctions, the Court found Ms Dabalos continued her unregistered preparer misconduct on 365 occasions, acting in contempt, and applying an additional penalty of 12 months' imprisonment.
In sentencing Ms Dabalos, her honour Justice Banks-Smith noted, ‘having regard to the repeated nature of the contempts, and the matters above, I accept the Board's submissions that Ms Dabalos's conduct was of such seriousness that it can be classified as criminal. It has the tendency to seriously prejudice the public interest in protecting the effective administration of justice.’
The Federal Court noted these sanctions provide a strong message of deterrence, ‘I acknowledge that Ms Dabalos has indicated a level of remorse to the Court. However before committing the contempts she had the opportunity to assess and desist and chose not to do so. Penalties imposed on Ms Dabalos to date, including a significant pecuniary penalty, have had little effect in changing her conduct. The issue of deterrence, particularly specific deterrence, is heightened in the circumstances of this case.’
Mr de Cure added, ‘misconduct by unregistered preparers can involve the exploitation of vulnerable clients. Some unregistered preparers prey on clients who are unfamiliar with the tax system, lodge false returns with the Australian Taxation Office (ATO), and expose clients to significant taxes, penalties and financial stress.'
‘The TPB’s compliance strategy will identify and address unregistered preparer misconduct to protect the community and support the integrity of the tax profession and the tax system. Unregistered preparers could face injunctions, significant penalties and jail if acting criminally or in contempt.’
Clients of unregistered preparers should review their tax affairs, with a trusted tax practitioner if required, and address any tax issues with the ATO. Taxpayers seeking professional tax advice should engage a tax practitioner registered with the TPB by checking the TPB register.
About the Tax Practitioners Board
The TPB regulates tax practitioners in order to protect consumers and ensure the integrity of the profession and the tax system. The TPB aims to assure the community that tax practitioners meet appropriate standards of professional and ethical conduct. Follow us. on X, LinkedIn and Facebook.