United States of America v. Bonds

Filing 5

ORDER granting 4 Motion for Permanent Injunction. Signed by Judge Eldon E. Fallon on 10/13/11. (ala, )

IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF LOUISIANA

UNITED STATES OF AMERICA
Plaintiff,
v.
TRACY B. BONDS, individually and
d/b/a TRACY’S TAX SERVICE
Defendant.

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Civil No. 2:11-cv-02495-EEF-ALC

ORDER FOR PERMANENT INJUNCTION
IT IS ORDERED THAT defendant Tracy Bonds, individually and doing business as
Tracy’s Tax Service, her representatives, agents, servants, employees, attorneys, independent
contractors, and anyone in active concert or participation with her are permanently enjoined
under 26 U.S.C. §§ 7402 and 7407 from directly or indirectly;
(1) engaging in conduct subject to penalty under 26 U.S.C. § 6694, including
preparing federal income tax returns that assert or contain unreasonable
positions or positions that willfully or recklessly understate a customer’s
liability;
(2) preparing and filing federal tax returns based on information known or
suspected to be fraudulent, such as claiming false dependents, using
suspicious or fraudulent W-2s, or reporting income or deductions or
losses from sham businesses;
(3) preparing or filing, or assisting in the preparation or filing of any federal
tax return, or amended return, for any other person or entity that claims

the EITC for which the due diligence required by 26 U.S.C. § 6695 (and
the accompanying Treasury regulations) has not been conducted,
specifically:
(a) Bonds and her representatives, agents, servants, employees,
attorneys, independent contractors, and anyone in active concert or
participation with her, must make and document inquiries that ensure
that any person reported as a qualifying child is the taxpayer’s son,
daughter, stepchild, foster child, or a descendant of any of them (for
example the taxpayer’s grandchild), or is the taxpayer’s brother, sister,
half brother, half sister, stepbrother, stepsister, or a descendant of any
of them (for example, the taxpayer’s niece or nephew); and
(b) Bonds and her representatives, agents, servants, employees,
attorneys, independent contractors, and anyone in active concert or
participation with her, must make and document inquiries that ensure
that any person reported as a qualifying child is:
1) under 19 years old at the end of the tax year for which the
return is being prepared by obtaining a copy of that child’s birth
certificate or other document which verifies the child’s birth
date; or
2) younger than the taxpayer and is under 24 years old at the end
of the tax year for which the return is being prepared by

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obtaining a copy of that child’s birth certificate or other
document which verifies the child’s birth date and was a fulltime student for five months during the tax year for which the
return is being prepared by obtaining a letter from the school in
which the child was enrolled or other documents, such as report
cards, from the school which verify that the child was enrolled,
or
3) permanently and totally disabled, such that he or she cannot
engage in any substantial gainful activity because of a physical
or mental condition and a doctor has determined that the
condition has lasted or can be expected to last continuously for
at least a year or can lead to death, by obtaining documentation
from a doctor that verifies the child’s disability; and
(c) Bonds and her representatives, agents, servants, employees,
attorneys, independent contractors, and anyone in active concert or
participation with her, must make and document inquiries that ensure
that any person reported as a qualifying child lived with the taxpayer
for more than six months during the year for which the return is being
prepared; and
(d) Bonds and her representatives, agents, servants, employees,
attorneys, independent contractors, and anyone in active concert or

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participation with her, must make and document inquiries that ensure
that any person reported as a qualifying child cannot file a joint return
for the year for which the return is being prepared.
(4) engaging in any other conduct subject to penalty under 26 U.S.C. §§
6695 and/or 6701, including preparing any part of a return or claim for
refund that includes an understatement due to an unreasonable position or
a willful understatement of tax;
(5) engaging in conduct that substantially interferes with the proper
administration and enforcement of the internal revenue laws; and
(6) engaging in any other activity subject to penalty under the Internal
Revenue Code.
IT IS FURTHER ORDERED, under 26 U.S.C. § 7402, that for two years from the
date of this Order, Bonds is required to display this Order for permanent injunction
prominently in her place of business such that all current and future customers are aware of
the due diligence requirements imposed upon Bonds and her representatives, agents,
servants, employees, attorneys, independent contractors, and anyone in active concert or
participation with her.
IT IS FURTHER ORDERED, under 26 U.S.C. § 7402, that Bonds is required to
complete 6 hours of education regarding tax preparation by attending, either in person or online, an IRS Tax Forum or a Tax Practitioner Institute class, or some other similar program,
before December 31, 2011. Bonds must mail to counsel for the United States a sworn

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statement that she has complied with this requirement and provide the name(s) of the
course(s) she attended by January 15, 2012.
IT IS FURTHER ORDERED that the Court shall retain jurisdiction to enforce this
injunction and the United States is permitted to engage in post-judgment discovery in
accordance with the Federal Rules of Civil Procedure to ensure compliance with the
permanent injunction.

IT IS SO ORDERED.
New Orleans, Louisiana this of _________________,
Signed this ___________day13th day of October, 2011.2011

_________________________________
ELDON E. FALLON
UNITED STATES DISTRICT JUDGE

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