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Sydney accountant Jayden Van Dyke illegally prepared 3,359 returns over four years.
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Unregistered tax preparer fined $1.8m for record TASA breaches
19 August 2024
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A Sydney accountant has been fined a record $1.8 million after illegally preparing 3,359 tax returns over four years, the largest number of violations ever prosecuted by the Tax Practitioners Board in the Federal Court.
In a judgment last week, Justice Wendy Abraham also permanently banned Jayden Van Dyke from providing tax agent services without proper registration.
Van Dyke admitted to breaching section 50-5(1) of the Tax Agent Services Act 2009 (TASA) on 3,359 separate occasions between September 2019 and July 2023 by preparing and lodging income tax returns despite never being a registered tax agent.
His illegal activities continued even after a cease-and-desist letter from the TPB in September 2022.
Justice Abraham said the record number of TASA contraventions necessarily gave rise to a far greater penalty than ever previously imposed.
She noted Van Dyke’s conduct undertaken for financial gain in knowing defiance of the law and strong penalties would be needed to deter others given the “real temptation for unethical and unprofessional people to provide unregistered tax agent services”.
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“This was deliberate, repeated, and sustained conduct, which continued even after being warned of legal action in the cease-and-desist letter,” she said.
“[Van Dyke] exposed many taxpayers to a scenario whereby tax agent services were being provided without the protections offered by a person who is registered under the TASA and subject to regulation by the board.”
According to evidence presented by the TPB, Van Dyke told clients he was registered tax agent with 22 years' experience and used their MyGov login details to lodge returns.
He charged clients an average of $500 per return, netting him a total of $1.66 million over the four years.
Van Dyke continued providing services even after receiving a cease-and-desist letter from the TPB but concealed his income from the ATO by omitting it in his personal tax returns.
An ATO audit in 2023 for income years between 2019 and 2022 led to an order to pay back $2 million in taxes and a $785,543 administrative penalty.
Van Dyke declared bankruptcy on 16 April 2024.
The TPB submitted to the court that he should be fined between $1,000 to $1,500 per contravention, citing the need for a strong deterrent to penalise Van Dyke and discourage others.
Van Dyke argued the TPB’s range would be “oppressive” given his financial position as an undischarged bankrupt, outstanding ATO liabilities and mental health.
Justice Abraham determined that a $1.8 million penalty was the minimum amount necessary to satisfy the need for deterrence without oppressing Van Dyke.
“There is a real temptation for unethical and unprofessional people to provide unregistered tax agent services for financial benefit. As reflected by this case, significant profits can be made,” she said.
“The fact that this conduct can so easily be undertaken, and on a large scale, generating significant financial reward, starkly highlights the importance of deterrence.”
“The fact of any contraventions after the cease-and-desist letter aggravates the wrongdoing.”
Noting the sheer volume of Van Dyke’s breaches of section 50-5(1), which dwarfed the previous record set by the Ordiales case of 636 breaches, she said “applying the correct principles to the facts will necessarily give rise to a far greater penalty than previously imposed”.
The hefty fine is the highest ever secured against an unregistered preparer but is also less than 1 per cent of the maximum $186.8 million penalty available.
The court also issued a permanent injunction barring Van Dyke from providing tax agent services without proper registration under TASA and ordered him to cover the TPB’s legal costs.
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