§7408 — Actions to enjoin specified conduct related to tax shelters and reportable transactions
38 cases·15 followed·2 distinguished·2 overruled·19 cited—39% support
Statute Text — 26 U.S.C. §7408
A civil action in the name of the United States to enjoin any person from further engaging in specified conduct may be commenced at the request of the Secretary. Any action under this section shall be brought in the district court of the United States for the district in which such person resides, has his principal place of business, or has engaged in specified conduct. The court may exercise its jurisdiction over such action (as provided in section 7402(a)) separate and apart from any other action brought by the United States against such person.
In any action under subsection (a), if the court finds—
that the person has engaged in any specified conduct, and
that injunctive relief is appropriate to prevent recurrence of such conduct,
the court may enjoin such person from engaging in such conduct or in any other activity subject to penalty under this title.
For purposes of this section, the term “specified conduct” means any action, or failure to take action, which is—
subject to penalty under section 6700, 6701, 6707, or 6708, or
in violation of any requirement under regulations issued under
section 330 of title 31
, United States Code.
If any citizen or resident of the United States does not reside in, and does not have his principal place of business in, any United States judicial district, such citizen or resident shall be treated for purposes of this section as residing in the District of Columbia.
38 Citing Cases
Cathcart pursuant to section 7408.
As the District Court stated in its order: - 28 - Section 7408 * * * authorizes a court to enjoin persons who have engaged in conduct subject to penalty under Code §6700 from engaging in further such conduct or any other conduct subject to penalty under the Code ifthe Court finds that injunctive reliefis appropriate to prevent recurrence ofthe conduct.
Pursuant to section 7408, on August 8, 1983, the United States filed a civil complaint in the U.S.
The Winer Section 7408 Injunction Proceeding In 1984, Winer and Winer Development Corp.
Additionally, the Court ofAppeals for the Tenth Circuit applied the preponderance ofthe evidence standard in a case for injunctive reliefunder section 7408 based on a violation ofsection 6700.
Additionally, the Court ofAppeals for the Tenth Circuit applied the preponderance ofthe evidence standard in a case for injunctive reliefunder section 7408 based on a violation ofsection 6700.
face of IRS statements to the contrary was not in good faith. - 61 - [*61] Because the District Court concluded that the Government was entitled to an injunction under section 7407, it did not opine about whether an injunction was appropriate under section 7408. Also on August 20, 2007, the District Court filed ajudgment and permanent injunction against petitioner, restraining and enjoining him from a broad range of activities relating to preparing income tax returns for mariner taxpayers, inclu
face of IRS statements to the contrary was not in good faith. - 61 - [*61] Because the District Court concluded that the Government was entitled to an injunction under section 7407, it did not opine about whether an injunction was appropriate under section 7408. Also on August 20, 2007, the District Court filed ajudgment and permanent injunction against petitioner, restraining and enjoining him from a broad range of activities relating to preparing income tax returns for mariner taxpayers, inclu
Court ofAppeals for the Tenth Circuit (Court ofAppeals), the court to which an appeal in this case would normally lie, was asked to decide whether to sustain an injunction under section 7408 that the U.S.
lties against persons who prepare frivolous returns or promote frivolous positions, and those persons may also face criminal prosecution. Promoters and others who assist taxpayers in engaging in these schemes also may be enjoined from doing so under section 7408. 2We note that the Commissioner's position, as stated above, was made public as early as 2004. -10- Courts generally look to the face ofthe documents to determine whether a taxpayer is liable for a frivolous return penalty as a matter of
As the District Court stated in its order: - 28 - Section 7408 * * * authorizes a court to enjoin persons who have engaged in conduct subject to penalty under Code §6700 from engaging in further such conduct or any other conduct subject to penalty under the Code ifthe Court finds that injunctive reliefis appropriate to prevent recurrence ofthe conduct.
, 111 Stat. 1070-1071 (amending sec. 512(e) to repeal the application of the unrelated business income tax to ESOPs for years beginning after Dec. 31, 1997). "In United States v. Stover, 731 F. Supp. 2d 887, 891, 895 (W.D. Mo. 2010) (an action under sec. 7408), the court described the transaction in which a business owner [formed] a separate business denominated as a management company. The "operating company"--the initial, pre-existing business--retains the new company to pggform "management se
, 111 Stat. 1070-1071 (amending sec. 512(e) to repeal the application of the unrelated business income tax to ESOPs for years beginning after Dec. 31, 1997). "In United States v. Stover, 731 F. Supp. 2d 887, 891, 895 (W.D. Mo. 2010) (an action under sec. 7408), the court described the transaction in which a business owner [formed] a separate business denominated as a management company. The "operating company"--the initial, pre-existing business--retains the new company to pggform "management se
o'"establ'ish` a violation of § 6700',,warranting an injunction-undera§ 7408, the government must prove tha t defendant': ( 1)'organized or sold, or°participated,in the organization or sale' of, an entity, plan, or r arrangement ; (2) made orrs caused to °be made; `` false or fraudu°lentstatemerit's'concerning the`tax°benefits to b e °der vedd from the entity ' plan, or arrangement ; '(3) knew or had reason to know t
The report and recommendation of the magistrate judge, which was adopted by the District Court judge, stated: Section 7408 authorizes a court to enjoin persons who have engaged in any conduct subject to penalty under § 6700 if the court finds that injunctive relief is appropriate to prevent the recurrence of such conduct.
that he and RRI, along with certain other individuals and entities, specifically including Miller, Bambara, and PI, were enjoined in the mid- 1980's by the U.S. District Court for the District of Massachusetts in respect of what was determined to be an abusive tax shelter involving the leasing of recycling equipment. See 1985-1 C.B. 671; see also sec. 7408.
that he and RRI, along with certain other individuals and entities, specifically including Miller, Bambara, and PI, were enjoined in the mid- 1980's by the U.S. District Court for the District of Massachusetts in respect of what was determined to be an abusive tax shelter involving the leasing of recycling equipment. See 1985-1 C.B. 671; see also sec. 7408.