United States of America v. Simon

Filing 26

MEMORANDUM OPINION AND ORDER granting 18 Motion for Summary Judgment. (Signed by Judge Drew B Tipton) Parties notified. (kmp4)

United States District Court
Southern District of Texas

ENTERED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
v.
DONALD SIMON,
Defendant.

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January 27, 2025
Nathan Ochsner, Clerk

Civil Action No. 4:22-CV-03120

MEMORANDUM OPINION AND ORDER
Defendant Donald Simon is an admitted tax fraud. In its complaint against Simon,
the United States alleged that Simon “prepares false and fraudulent U.S. Individual
Income Tax Returns . . . for customers to obtain tax refunds to which the customers are
often not entitled.” (Dkt. No. 1 at 3). While Simon filed an answer, he did not deny this
allegation. (Dkt. No. 6 at 1). Instead, Simon responded to this allegation with “Defendant
____.” (See id. at 1). In fact, Simon responded to almost all of the United States’ allegations
in this way. (See id. at 1–4).
Since Simon did not deny the United States’ allegations, he has therefore admitted
them. Fed. R. Civ. P. 8(b)(6). The only question remaining is whether these admitted
allegations entitle the United States to summary judgment on its claims and to permanent
injunctive relief. As explained below, they do. Accordingly, the United States’ Motion
for Summary Judgment, (Dkt. No. 18), is GRANTED.

I.

BACKGROUND1
Donald Simon lives in Houston, Texas, where he helps clients prepare their federal

income tax returns. (Dkt. No. 1 at 2–3). For the 2018–2020 tax years, Simon prepared over
1,200 tax returns using his own preparer-identification number and over 500 tax returns
using someone else’s. (Id. at 2–4). Of these roughly 1,700 returns, 94.8% claimed refunds.
(See id.).
Simon achieved these impressive numbers in large part through fraud. (See id. at
4–14) (describing Simon’s fraudulent activities); (see also Dkt. No. 6 at 1–4) (failing to deny
these allegations). Broadly, Simon engaged in three fraudulent practices:
1.

Simon falsely claimed energy-efficiency expenses and credits on his
clients’ returns, (see Dkt. No. 1 at 4–8);

2.

Simon falsely claimed electric-vehicle expenses and credits on his
clients’ returns, (see id. at 8–11); and

3.

Simon falsely claimed various business expenses and credits on his
clients’ returns, including when the client did not own a qualifying
business, (see id. at 11–14).

The IRS estimates that Simon’s fraudulent conduct cost the United States close to
$2 million in tax revenue. (Id. at 15).
Simon, who appears pro se, does not deny any of this. In his answer, he denies
only two of the United States’ allegations, (Dkt. No. 6 at 1, 4), admits to five, (id. at 1), and
states that “no admission or denial is required” for three others because they are “merely
a statement of incorporation by reference,” (id. at 3). But mostly, Simon responds to the

1

Except where noted, this section contains only undisputed facts, and all facts and
reasonable inferences have been construed in favor of the nonmovant. Renfroe v. Parker, 974 F.3d
594, 599 (5th Cir. 2020). The Court has not weighed evidence or made credibility findings. Id.

2

United States’ allegations with the word “Defendant” followed by four (or sometimes
five) underscores and a period (though sometimes not). For example,

(Id. at 3). Sixty-five of the seventy-eight numbered paragraphs in Simon’s answer
respond this way, including those responding to the material fact allegations. (See id. at
1–4).
A few months after this answer, Simon filed a handwritten request to continue a
pretrial conference. (Dkt. No. 8). After that . . . nothing. Simon made no further
appearances. He did, however, answer a phone call from the United States’ counsel as
recently as June 18, 2024. (See Dkt. 21 at 3).
The United States moved for summary judgment on its claims, requesting
injunctive relief. (Dkt. No. 18). Simon did not respond.
II.

LEGAL STANDARD
Summary judgment is appropriate when there is “no genuine dispute as to any

material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.

3

56(a). A fact is material if it could affect the suit’s outcome under governing law. Renwick
v. PNK Lake Charles, LLC, 901 F.3d 605, 611 (5th Cir. 2018) (citing Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986)). And “[a] dispute about
a material fact is ‘genuine’ if the evidence is such that a reasonable jury could return a
verdict for the non-moving party.” TIG Ins. v. Sedgwick James, 276 F.3d 754, 759 (5th Cir.
2002) (quoting Anderson, 477 U.S. at 248, 106 S.Ct. at 2510). The moving party “always
bears the initial responsibility of informing the district court of the basis for its motion”
and identifying the record evidence that “it believes demonstrate[s] the absence of a
genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548,
2553, 91 L.Ed.2d 265 (1986). “If the moving party fails to meet [its] initial burden, the
motion [for summary judgment] must be denied, regardless of the nonmovant’s
response.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en banc) (per
curiam).
If the movant meets this burden, the nonmovant must come forward with specific
facts showing a genuine issue for trial. Fed. R. Civ. P. 56(c); see also Matsushita Elec. Indus.
v. Zenith Radio Corp., 475 U.S. 574, 585–87, 106 S.Ct. 1348, 1355–56, 89 L.Ed.2d 538 (1986).
The nonmovant must “‘go beyond the pleadings and by [the nonmovant’s] own
affidavits, or by the depositions, answers to interrogatories, and admissions on file,
designate specific facts showing that there is a genuine issue for trial.’” Nola Spice Designs,
LLC v. Haydel Enters., 783 F.3d 527, 536 (5th Cir. 2015) (quoting Celotex, 477 U.S. at 324,
106 S.Ct. at 2553). “The nonmovant must ‘identify specific evidence in the record
and . . . articulate the precise manner in which that evidence supports his or her claim.’”
4

Carr v. Air Line Pilots Ass’n, Int’l, 866 F.3d 597, 601 (5th Cir. 2017) (per curiam) (quoting
Ragas v. Tenn. Gas Pipeline Co., 136 F.3d 455, 458 (5th Cir. 1998)), as revised (July 14, 2017).
If evidence is merely colorable or not significantly probative, summary judgment is
appropriate. Parrish v. Premier Directional Drilling, L.P., 917 F.3d 369, 378 (5th Cir. 2019)
(citing Anderson, 477 U.S. at 249–50, 106 S.Ct. at 2511).
In reviewing a motion for summary judgment, the district court views the
evidence in the light most favorable to the nonmovant. Carr, 866 F.3d at 601. This means
that courts must resolve factual controversies in the nonmovant’s favor, “but only
when . . . both parties have submitted evidence of contradictory facts.” Little, 37 F.3d at
1075.
III.

DISCUSSION
“An allegation—other than one relating to the amount of damages—is admitted if

a responsive pleading is required and the allegation is not denied.” Fed. R. Civ. P. 8(b)(6).
And even facts initially denied may later be considered undisputed if a party does not
respond to an opposing party’s motion for summary judgment. Flowers v. Deutsche Bank
Nat’l Tr. Co., 614 F.App’x 214, 215 (5th Cir. 2015) (citing Eversley v. MBank Dall., 843 F.2d
172, 174 (5th Cir. 1988)).
Simon did not deny any of the United States’ material factual allegations, (see Dkt.
No. 6), and did not respond to the United States’ summary-judgment motion. While the
Court acknowledges the well-settled principle that “[p]ro se pleadings are to be ‘liberally
construed,’” Fed. Express Corp. v. Holowecki, 552 U.S. 389, 402, 128 S.Ct. 1147, 1158, 170
L.Ed.2d 10 (2008) (emphasis in original) (quoting Estelle v. Gamble, 429 U.S. 97, 106, 97

5

S.Ct. 285, 292, 50 L.Ed.2d 251 (1976)), Simon’s silence leaves the Court with nothing to
liberally construe.2 Accordingly, the Court takes the United States’ facts as true and asks
only whether they entitle it to summary judgment and permanent injunctive relief.
The United States claims that it is entitled to injunctive relief under three
provisions of the Internal Revenue Code: 26 U.S.C. §§ 7407, 7408, and 7402. (See Dkt. No.
18 at 7–16). It requests an injunction prohibiting Simon from engaging in various taxrelated activities and requiring him to take several remedial measures. (See id. at 16); (see
also Dkt. No. 1 at 20–22). As explained below, the United States has shown that it is
entitled to summary judgment and permanent injunctive relief under all three provisions.
A.

26 U.S.C. § 7407

Section 7407, enacted as part of the Tax Reform Act of 1976, reflects Congress’s
intent to prevent abuses by tax preparers in reporting clients’ income tax liabilities.
United States v. Ernst & Whinney, 735 F.2d 1296, 1302 (11th Cir. 1984).3 Three prerequisites
must be met for a court to issue an injunction under Section 7407: (1) “the defendant must
be a tax preparer”; (2) “the conduct complained of must fall within one of the four areas
of proscribed conduct [under] § 7407(b)(1)”; and (3) “the court must find that an
injunction is ‘appropriate to prevent the recurrence’ of the proscribed conduct [under]
§ 7407(b)(2).” Id. at 1303.

2

Furthermore, in his answer, Simon affirmatively denied some of the United States’
allegations while admitting others or stating that “no admission or denial is required.” (Dkt. No.
6 at 1–4). The undermines any suggestion that his failure to address the United States’ material
allegations was due to ignorance or a lack of awareness of the need to deny them.
3

The Fifth Circuit has not addressed Section 7407. Accordingly, the Court relies on the
statute’s text as explained by the well-reasoned analyses of other circuit courts.

6

1.

Simon is a tax return preparer

A “tax return preparer” is “any person who prepares for compensation . . . any
return of tax imposed by this title or any claim for refund of tax imposed by this title.”
26 U.S.C. § 7701(a)(36)(A). Simon prepares tax returns for compensation, (see Dkt. No. 1
at 2–3, 14); (see also Dkt. No. 18 at 9), so he is a tax return preparer.
2.

Simon engaged in proscribed conduct

Section 7407(b) lists the proscribed conduct to be enjoined. Injunctive relief may
be appropriate if a tax preparer has engaged (1) “in any conduct subject to penalty under
section 6694” or (2) “in any other fraudulent or deceptive conduct which substantially
interferes with the proper administration of the Internal Revenue laws.” 26 U.S.C.
§ 7407(b)(1)(A), (D).
Sections 6694(a) and (b) of the Internal Revenue Code provide for penalties against
tax return preparers who understate a customer’s tax liability based on unrealistic
positions or because of the preparer’s willful, reckless, or intentional disregard of rules
and regulations. 26 U.S.C. § 6694(a)–(b). As detailed throughout the United States’
complaint, Simon repeatedly violated Sections 6694(a) and (b) by preparing tax returns
containing false business losses and claiming false energy-efficiency and electric-vehicle
credits. (Dkt. No. 1 at 3–14). “Courts across the nation have held that [claiming false
losses and credits] is unlawful under § 6694.” United States v. Umbrella Fin. Servs., LLC,
715 F.Supp.3d 967, 975 (N.D. Tex. 2024) (collecting cases). And Simon failed to deny the
United States’ allegations that he knowingly engaged in this conduct. (See Dkt. No. 1 at
3–4, 16–17); (see also Dkt. No. 6 at 1–4).

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Simon also engaged in fraudulent conduct that “substantially interfere[d] with the
proper administration of the Internal Revenue laws.” 26 U.S.C. § 7407(b). Simon’s
customers, through returns he prepared, did not report their correct tax liabilities, did not
pay taxes they owed, and received refunds to which they were not entitled. (See Dkt. No.
1 at 4–14).
3.

Injunctive relief is appropriate to prevent the recurrence of
Simon’s conduct

Once the United States establishes any of the violations listed in Section 7407, it
need only demonstrate that “injunctive relief is appropriate to prevent recurrence of such
conduct.” 26 U.S.C. § 7407(b)(2). If the court finds that a tax preparer “continually or
repeatedly” engaged in any of the proscribed conduct and that a narrower injunction
would not be enough to prevent future violations, the court may enjoin that person from
acting as an income tax return preparer altogether. Id.
Courts consider the following factors when determining whether injunctive relief
is appropriate to prevent a likely recurrence:
1.

the gravity of the harm caused by the offense;

2.

the extent of the defendant’s participation;

3.

the defendant’s degree of scienter;

4.

the isolated or recurrent nature of the infraction;

5.

the defendant’s recognition (or nonrecognition) of his own
culpability; and

6.

the likelihood that the defendant’s occupation would place him in a
position where future violations could be anticipated.

8

United States v. Est. Pres. Servs., 202 F.3d 1093, 1105 (9th Cir. 2000); United States v. Kaun,
827 F.2d 1144, 1149–50 (7th Cir. 1987) (same); United States v. Stover, 650 F.3d 1099, 1112
(8th Cir. 2011) (same); United States v. Gleason, 432 F.3d 678, 683 (6th Cir. 2005) (same);
United States v. Stinson, 729 F.App’x 891, 896 (11th Cir. 2018) (same).
a.

Gravity of harm

Simon’s conduct caused significant harm. The United States alleged that Simon’s
customers “are harmed by his behavior because they pay him to prepare proper tax
returns and he does not do so,” which means that “those customers may face assessments
for tax deficiencies, interest, and penalties.” (Dkt. No. 1 at 14–15). Simon’s “conduct also
harms the United States because his customers’ understated tax liabilities result in lost
tax revenue” estimated “to be close to two million dollars.” (Id. at 15). Likewise, “the IRS
must devote resources to identifying and examining the tax returns of [Simon’s]
customers; ascertaining their correct tax liabilities; collecting any taxes, interest, and
penalties they owe; and recovering any tax refunds erroneously issued to them.” (Id.).
Simon’s “conduct also harms honest tax return preparers” because Simon “gains an
unfair competitive advantage over tax return preparers who prepare returns in
accordance with the law.” (Id.). Finally, Simon’s conduct “harms the public at large by
undermining public confidence in the administration of the federal tax system and
encouraging non-compliance with internal revenue laws.” (Id.). Simon does not deny
any of these allegations. (See generally Dkt. No. 6).

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b.

Extent of participation

Simon’s participation is extensive. Simon’s preparer-identification number is
listed on hundreds of false returns, (Dkt. No. 1 at 2), and he does not deny the United
States’ allegation that he used someone else’s identification number to falsify hundreds
more. (See Dkt. No. 1 at 2–4); (see also Dkt. No. 6 at 1–4).
c.

Knowledge

As someone who holds himself out as a tax professional, (see Dkt. No. 1 at 2),
Simon is charged with knowledge of the Internal Revenue Code, see United States v. Venie,
691 F.Supp. 834, 839 (M.D. Pa. 1988) (citing United States v. Savoie, 594 F.Supp. 678, 684
(W.D. La. 1984)). Simon also does not deny the United States’ allegations that he
knowingly engaged in fraudulent conduct and listed expenses and credits unsupported
by—and sometimes contradictory to—the information he received from his clients. (See
Dkt. No. 1 at 3–14, 16–17); (see also Dkt. No. 6 at 1–4).
d.

Recurrent nature

Simon’s conduct spanned three years and more than 1,700 tax returns. (Dkt. No.
1 at 2–4). Based on the duration of the scheme and the large number of returns that Simon
prepared, (id.), this was not an isolated event.
e.

Recognition of culpability

Though Simon has, in some sense, recognized his culpability by failing to deny the
United States’ allegations of fraud, he has not expressed remorse, acknowledged his
conduct as unlawful, or recognized the harm he caused. Cf. United States v. Carter, No.
3:16-CV-00673, 2017 WL 4369488, at *4 (W.D.N.C. Oct. 2, 2017) (“The record contains no

10

indication that Defendant has ever shown remorse or even acknowledged her [tax-fraud]
conduct as unlawful.”), aff’d, 711 F.App’x 177 (4th Cir. 2018); United States v. Stinson, 239
F.Supp.3d 1299, 1322 (M.D. Fla. 2017) (“At trial, Stinson showed remorse only that his
operation had been halted . . . . Not once has Stinson recognized the harm he caused his
customers.”), aff’d, 729 F.App’x 891 (11th Cir. 2018).
f.

Likelihood of future violation

Likewise, Simon has provided no assurances that he will desist from his
fraudulent conduct and has proved evasive throughout this lawsuit. (See Dkt. Nos. 13,
21). He does not dispute the United States’ claim that he will “further attempt to conceal
his actions, find new ways to assist with tax return preparation, or find new phony claims
to which his customers are not entitled on returns to skirt the language of a limited
injunction.” (Dkt. No. 18 at 11).
***
Based on the totality of the circumstances—and considering that all of these factors
favor the Government—the Court determines that an injunction under Section 7407
preventing Simon from acting as an income tax return preparer is appropriate and
necessary to prevent future interference with the Internal Revenue laws.
B.

26 U.S.C. § 7408

Under 26 U.S.C. § 7408, a court may enjoin an individual from engaging in conduct
subject to a penalty under 26 U.S.C. §§ 6700 or 6701 if a court determines that the
individual has engaged in the proscribed conduct and “injunctive relief is appropriate to
prevent recurrence” of the conduct. The United States contends that Simon is subject to

11

penalty under Section 6701. (Dkt. No. 1 at 17–18); (see also Dkt. No. 18 at 11–12). Section
6701(a) imposes a penalty on any person who (1) aids, assists, or advises with respect to
the preparation or presentation of a tax return; (2) knows or has reason to know that the
return will be used in connection with a material matter arising under federal tax law;
and (3) knows that the return (if used) would result in an understatement of another
person’s tax liability. 26 U.S.C. § 6701. Put simply, “Section 6701(a) imposes a penalty
on any person who knowingly aids and abets others in underreporting their tax liability.”
United States v. Simon, 824 F.App’x 986, 990 (11th Cir. 2020).
According to the undenied allegations in the United States’ complaint, Simon did
exactly that. Simon prepared or helped prepare his clients’ tax returns. (Dkt. No. 1 at 3–
4). Simon knew that these returns would be submitted to the IRS as a representation of
the clients’ tax liabilities, (id. at 3–4, 18), which is a “material matter,” see Umbrella Fin.
Servs., LLC, 2024 WL 455341, at *5. And Simon knew that the returns understated his
clients’ tax liabilities. (Dkt. No. 1 at 18). Moreover, Simon’s conduct was pervasive, (see
id. at 4–14), and “pervasive conduct is sufficient to show actual knowledge as required
by Section 7601,” United States v. Johnston, No. 1:21-CV-00478, 2022 WL 17978909, at *4
(E.D. Tex. May 12, 2022).
In short, Simon has repeatedly engaged in conduct subject to penalty under
Section 6701.

The Court may therefore issue an injunction under Section 7408 if

injunctive relief is appropriate to prevent the recurrence of that conduct. 26 U.S.C. § 7408.
As already explained, see supra III(A)(3), injunctive relief is appropriate to prevent a likely
recurrence of Simon’s conduct.
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C.

26 U.S.C. § 7402(a)

Finally, Section 7402(a) grants district courts broad authority to issue injunctions
“as may be necessary or appropriate for the enforcement of the internal revenue laws.”
26 U.S.C. § 7402(a). The authority provided under Section 7402(a) is “in addition to and
not exclusive of any and all other remedies” available to enforce the Internal Revenue
laws. Id. The statute manifests “a congressional intention to provide the district courts
with a full arsenal of powers to compel compliance with the internal revenue laws.”
Brody v. United States, 243 F.2d 378, 384 (1st Cir. 1957). Accordingly, “[t]he language of
§ 7402(a) encompasses a broad range of powers . . . .” Ernst & Whinney, 735 F.2d at 1300.
“[T]he majority of district courts in Texas and elsewhere” recognize “that the
traditional requirements associated with injunctions need not necessarily be met in order
to obtain a § 7402(a)-based injunction.” United States v. Padron, No. 7:17-CV-00009, 2017
WL 2060308, at *4 (S.D. Tex. May 12, 2017) (collecting cases). Even so, courts are “free”
to weigh the traditional factors when considering an injunction under this Section. United
States v. Grider, No. 3:10-CV-00582, 2010 WL 4514623, at *2 (N.D. Tex. Nov. 2, 2010).
Under Section 7402(a),
A party seeking a permanent injunction must show: “(1) that
it has suffered an irreparable injury; (2) that remedies
available at law, such as monetary damages, are inadequate
to compensate for that injury; (3) that, considering the balance
of hardships between the plaintiff and defendant, a remedy
in equity is warranted; and (4) that the public interest would
not be disserved by a permanent injunction.”
Texas v. Yellen, 105 F.4th 755, 774 (5th Cir. 2024) (quoting eBay Inc. v. MercExchange, LLC,
547 U.S. 388, 391, 126 S.Ct. 1837, 1839, 164 L.Ed.2d 641 (2006)).

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1.

Irreparable injury

As the Court has already explained, see supra III(A)(3), Simon’s conduct has caused
substantial harm, much of which is irreparable (that is, not compensable). See Sampson v.
Murray, 415 U.S. 61, 90, 94 S.Ct. 937, 953, 39 L.Ed.2d 166 (1974). For these reasons, and
because Simon has not provided any argument to the contrary, the Court finds that
irreparable harm has resulted, and will continue to result, without an injunction.
2.

Inadequacy of legal remedies

Though the inadequacy of legal remedies is a traditional equitable-relief factor, the
language of Section 7402(a) suggests that it is not required for Section 7402-based
injunctions. See 26 U.S.C. § 7402(a) (“The remedies hereby provided are in addition to
and not exclusive of any and all other remedies . . . .”). In any case, there is no adequate
remedy at law because Simon’s continued operation causes irreparable harm to his
customers and the public at large, and there is no way of stopping him from fraudulently
preparing taxes absent an injunction. Likewise, “[t]he Government has no adequate
remedy at law” to recover its losses because individual suits against Simon’s customers
“would entangle the Government in a maze of lawsuits.” Savoie, 594 F.Supp. at 682.
3.

Balance of harms

The balance between the harm to the United States if Simon is not enjoined, and
the harm to Simon if he is, favors the United States. The United States asserts that, absent
an injunction, it will continue to suffer (1) loss of tax revenue; (2) a drain on IRS
compliance and investigative resources; and (3) harm to the tax system generally when
competitors and the public perceive that Simon is disregarding federal tax laws without

14

consequence. (Dkt. No. 1 at 14–15). On the other hand, if Simon is enjoined, his business
and personal financial stability will presumably suffer because he will not be able to
engage in the type of tax-preparation activities that are the foundation of his business.
Even so, because Simon’s “business model fundamentally depends on defrauding
customers and the government, which does not provide a legitimate source of income,”
any harm caused to Simon by an injunction would be “substantially outweighed by the
harm to which [his] clients” and the United States are subjected. United States v. Marc,
No. 6:18-CV-02147, 2020 WL 6064793, at *8 (M.D. Fla. Sept. 1, 2020).
4.

Public interest

A permanent injunction against Simon serves the public interest. There is a “broad
public interest in maintaining a sound tax system.” United States v. Lee, 455 U.S. 252, 253,
102 S.Ct. 1051, 1053, 71 L.Ed.2d 127 (1982). As the United States points out, an injunction
would “protect the public from Simon’s actions and spare his customers from having
false tax returns prepared in their names and facing potential IRS audits.” (Dkt. No. 18
at 15). Also, “[e]very bogus refund claimed by Simon not only depletes the Treasury[]
but—even if such efforts can be made—also requires the expenditure of more resources
to investigate and attempt their recovery.” (Id. at 15–16). The Court agrees.
***
Though “the traditional requirements associated with injunctions need not
necessarily be met in order to obtain a § 7402(a)-based injunction,” Padron, 2017 WL
2060308, at *4, the traditional factors support the United States’ application all the same.
The Court has determined that Simon’s conduct interferes with the proper administration

15

of the tax laws, and an injunction is appropriate and necessary to prevent future harm.
The Court has also considered the traditional equitable factors and concluded that each
factor favors imposing an injunction. Therefore, the Court finds that an injunction under
Section 7402(a) is warranted.
D.

SCOPE OF THE INJUNCTION

The United States has shown that it is entitled to injunctive relief under three
provisions of the Internal Revenue Code. The Court now determines the proper scope of
injunctive relief.
“‘[T]he scope of injunctive relief is dictated by the extent of the violation
established.’” ODonnell v. Harris County, 892 F.3d 147, 163 (5th Cir. 2018) (quoting Califano
v. Yamasaki, 442 U.S. 682, 702, 99 S.Ct. 2545, 2558, 61 L.Ed.2d 176 (1979)), overruled on other
grounds by Daves v. Dallas County, 22 F.4th 552 (5th Cir. 2022). “A district court abuses its
discretion if it does not narrowly tailor an injunction to remedy the specific action which
gives rise to the order. Thus, an injunction must be vacated if it fails to meet these
standards and is overbroad.’” Id. (quoting John Doe # 1 v. Veneman, 380 F.3d 807, 818 (5th
Cir. 2004)) (cleaned up). “‘The broadness of an injunction refers to the range of proscribed
activity . . . [and] is a matter of substantive law.’” Id. (quoting U.S. Steel Corp. v. United
Mine Workers of Am., 519 F.2d 1236, 1246 n.19 (5th Cir. 1975)).
The United States requests an injunction prohibiting Simon from engaging in
various tax-related activities and requiring Simon to take several remedial measures. (See
Dkt. No. 1 at 16–22). A review of the caselaw confirms that—given the serious and
pervasive nature of the violation established—the injunctive relief that the United States

16

requests is appropriate under Sections 7402, 7407, and 7408. Indeed, courts in this circuit
have entered injunctions like the one the United States requests under these provisions.
See, e.g., United States v. Alexander, No. 4:22-CV-04034, 2023 WL 5687033, at *1 (S.D. Tex.
July 20, 2023); United States v. Wells, No. 5:17-CV-00140, 2018 WL 3155722, at *1–2 (S.D.
Miss. June 5, 2018); United States v. Robinson, No. 2:18-CV-01258, 2018 WL 1305182, at *1–
2 (E.D. La. Feb. 16, 2018).
IV.

CONCLUSION
For the above reasons, the Court holds that the United States has shown its

entitlement to permanent injunctive relief under 26 U.S.C. §§ 7402, 7407, and 7408.
Accordingly, the United States’ Motion for Summary Judgment, (Dkt. No. 18), is
GRANTED. The Court will enter the permanent injunction in a separate order.
It is SO ORDERED.
Signed on January 26, 2025.
___________________________________
DREW B. TIPTON
UNITED STATES DISTRICT JUDGE

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