United States v. Moser

No. CV-05-00262 ACK-BMK, 2005 U.S. Dist. LEXIS 28256, 96 A.F.T.R.2d (RIA) 6943 (D. Haw. Oct. 17, 2005)



I.R.C. § 7402(a), in and of itself, authorizes the United States to seek an injunction against those who interfere with the enforcement of tax laws. Section 7402(a), however, goes beyond merely codifying a district court's general equity power to grant injunctions. This provision gives the district courts a full range of powerful tools to ensure the enforcement of both the spirit and the letter of the internal revenue laws. As the U.S. Court of Appeals for the First Circuit has noted, it would be difficult to find language more clearly manifesting a congressional intention to provide the district courts with a full arsenal of powers to compel compliance with the internal revenue laws.


Plaintiff government requested a permanent injunction against defendant tax preparer, who defrauded taxpayers and plaintiff with her tax-fraud schemes and the preparation of false income tax returns that claimed inflated or fabricated deductions in order to generate unlawful tax refunds for her customers. The district court recommended an order enjoining defendant from further illegal conduct.


Was plaintiff government entitled to a permanent injunction against defendant who committed fraud through her tax-fraud schemes and preparation of false income tax returns?




A permanent injunction was appropriate under I.R.C. § 7402(a) because an injunction prohibiting defendant from filing false tax returns, prohibiting her from promoting the availability of nonexistent tax deductions, and prohibiting her from instructing people to delay the IRS examination process through deceit and trickery was necessary and appropriate for the enforcement of the internal revenue laws. Defendant's conduct was causing irreparable injury to plaintiff government for which it had no adequate remedy at law.

Click here to view the full text case and earn your Daily Research Points.