§7407 — Title 26 Internal Revenue Code | U.S. Code

Summary

The United States can file a civil lawsuit, when the Secretary asks, to make a tax return preparer stop certain bad acts or to stop working as a preparer. The case is filed in a federal district court where the preparer lives or works, or where the taxpayer lives. The court can handle this case even if the government has other cases against the same preparer or taxpayer. A court can order the preparer to stop if it finds two things: first, the preparer did one of these—committed conduct punishable under sections 6694 or 6695 or a criminal tax law, lied about being allowed to practice before the IRS or about experience or education, guaranteed refunds or tax credits, or did other fraud or deception that substantially interferes with administering the tax laws; and second, a court order is needed to prevent the behavior from happening again.

Title 26, §7407

Internal Revenue Code — Source: USLM XML via OLRC

(a)A civil action in the name of the United States to enjoin any person who is a tax return preparer from further engaging in any conduct described in subsection (b) or from further acting as a tax return preparer 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 the tax return preparer resides or has his principal place of business or in which the taxpayer with respect to whose tax return the action is brought resides. 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 tax return preparer or any taxpayer.

(b)In any action under subsection (a), if the court finds—

(1)that a tax return preparer has—

(A)engaged in any conduct subject to penalty under section 6694 or 6695, or subject to any criminal penalty provided by this title,

(B)misrepresented his eligibility to practice before the Internal Revenue Service, or otherwise misrepresented his experience or education as a tax return preparer,

(C)guaranteed the payment of any tax refund or the allowance of any tax credit, or

(D)engaged in any other fraudulent or deceptive conduct which substantially interferes with the proper administration of the Internal Revenue laws, and

(2)that injunctive relief is appropriate to prevent the recurrence of such conduct,

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 7407 was renumbered section 7410 of this title.

Amendments

2007—Pub. L. 110–28, § 8246(a)(2)(I)(i)(I), substituted “tax return preparers” for “income tax return preparers” in section catchline. Subsec. (a). Pub. L. 110–28, § 8246(a)(2)(I)(i)(II)–(IV), substituted “tax return” for “income tax return” after “with respect to whose”, “tax return preparer” for “income tax preparer” after “district in which the” and after “against such”, and “a tax return preparer” for “an income tax return preparer” in two places. Subsec. (b). Pub. L. 110–28, § 8246(a)(2)(I)(i)(II), substituted “a tax return preparer” for “an income tax return preparer” in introductory provisions and subpar. (B) of par. (1) and in two places in concluding provisions. 1989—Subsec. (a). Pub. L. 101–239, § 7738(b), substituted “A civil” for “Except as provided in subsection (c), a civil”. Subsec. (c). Pub. L. 101–239, § 7738(a), struck out subsec. (c) relating to bonds to stay injunctions.

Statutory Notes and Related Subsidiaries

Effective Date

of 2007 AmendmentAmendment by Pub. L. 110–28 applicable to returns prepared after May 25, 2007, see section 8246(c) of Pub. L. 110–28, set out as a note under section 6060 of this title.

Effective Date

of 1989 Amendment Pub. L. 101–239, title VII, § 7738(c), Dec. 19, 1989, 103 Stat. 2404, provided that: “The

Amendments

made by this section [amending this section] shall apply to actions commenced after December 31, 1989.”

Effective Date

Section applicable to documents prepared after Dec. 31, 1976, see section 1203(j) of Pub. L. 94–455, set out as an

Effective Date

of 1976 Amendment note under section 7701 of this title.

§7407 Action to enjoin tax return preparers

Summary

Title 26, §7407

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Amendments

Effective Date

Effective Date

Citations & Metadata