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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 19-12104
Non-Argument Calendar
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D.C. Docket No. 1:17-cv-24285-KMW
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
VILBRUN SIMON,
SAINTANISE AGENORD,
SIMON ACCOUNTING & TAX SERVICES, LLC,
Defendants-Appellants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(September 14, 2020)
Before WILSON, LUCK, and ANDERSON, Circuit Judges.
PER CURIAM:
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Vilbrun Simon and Saintanise Agenord appeal the district court’s entry of a
permanent injunction prohibiting them from preparing federal tax returns. We
affirm.1
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
In November 2017, the United States filed a complaint against Vilbrun Simon,
Saintanise Agenord, Wilcienne Pierre, and Simon Accounting & Tax Services LLC.
The complaint sought a permanent injunction under 26 U.S.C. sections 7402(a),
7407, and 7408 prohibiting the four defendants from getting paid to prepare tax
returns.
The parties stipulated to the following facts before trial: (1) Simon was a paid
tax preparer who had prepared returns since 2009; (2) in 2012 and 2013, he worked
as a tax preparer at Ebenezer Tax Service, Inc., which, in 2015, was prohibited from
engaging in tax preparation services; (3) in 2012, Simon and his wife, Agenord,
formed Simon Accounting as a tax preparation business; (4) Agenord also owned
and operated, as a sole proprietor, a tax preparation service called Village Tax and
Multiservices; (5) Simon and Agenord prepared and filed tax returns while working
for Simon Accounting and Village Tax; (6) to file returns, Simon and Agenord had
1
Simon Accounting & Tax Services, LLC appealed the injunction as well but withdrew
the appeal in its initial brief. We construe that withdrawal as a motion to dismiss its appeal.
Because the government does not object in its brief, the motion is unopposed, and we grant it. See
Fed. R. App. P. 42(b); Luxottica Grp., S.P.A. v. Airport Mini Mall, LLC,
932 F.3d 1303, 1310 n.1
(11th Cir. 2019) (granting motion to dismiss appeal when cross-appellant abandoned it).
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their own preparer tax identification numbers issued by the Internal Revenue Service
that they reported on the tax returns they prepared; (7) the couple routinely prepared
returns for customers using each others’ preparer tax identification numbers; and
(8) the defendants frequently provided customers with incomplete copies of the
returns they prepared for those customers.
Pierre agreed to the injunction, while Simon, Agenord, and Simon Accounting
went to trial. After a three-day bench trial, the district court made oral findings of
fact. The court found that the defendants prepared fraudulent tax returns, hid their
fees from their clients, and “otherwise violated tax laws on hundred[s] and likely
thousands of returns.” Specifically, the defendants: (1) falsely claimed education
credits, student loan interest deductions, Schedule A deductions (charitable
contributions and unreimbursed employee expenses), and fuel tax credits; and
(2) failed to disclose their fees, review the returns with their clients, provide accurate
and complete copies of the returns to their clients, and use their own pin numbers
when filing returns. The court noted that, of the 4,200 tax returns the defendants
(including Pierre) filed for tax years 2012 through 2017, ninety-nine percent of those
returns claimed a refund, causing “a probable loss to the U.S. Government in the
millions in tax revenue.”
The district court, “find[ing] the statutory elements for injunctive relief under
[sections] 7407 and 7408 [were] satisfied,” entered a permanent injunction against
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the defendants, prohibiting them from preparing tax returns.2 Specifically, the
district court enjoined the defendants and Village Tax from: acting as federal tax
return preparers or assisting in the preparation of tax returns; participating in a
business that prepares tax returns; transferring information about filing tax returns;
engaging in conduct subject to penalty under the Internal Revenue Code; and
engaging in conduct that substantially interferes with the proper administration and
enforcement of the internal revenue laws. The defendants appeal the injunction.
STANDARD OF REVIEW
We review a district court’s decision to grant a permanent injunction for an
abuse of discretion. S.E.C. v. ETS Payphones, Inc.,
408 F.3d 727, 731 (11th Cir.
2005). “Determinations of law are reviewed de novo, while the findings of fact that
support an injunction are reviewed for clear error.”
Id. A district court abuses its
discretion if it applies an incorrect legal standard, applies the law in an unreasonable
or incorrect manner, follows improper procedures in making the determination, or
makes findings of fact that are clearly erroneous. Klay v. United Healthgroup, Inc.,
376 F.3d 1092, 1096 (11th Cir. 2004).
2
Because the district court found that injunctive relief was “appropriate under [sections]
7407 and 7408,” it declined to “address the [g]overnment’s request [for injunctive relief] under
[section] 7402.”
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DISCUSSION
Simon and Agenord contend that the district court abused its discretion by
permanently enjoining them from preparing tax returns under sections 7407 and
7408. Agenord argues that the evidence was insufficient because the district court
erroneously attributed Simon’s actions to her. Simon argues that the district court
should have fashioned a narrower injunction against him. We disagree. 3 But before
we address the defendants’ arguments, we first describe how the section 7407 and
section 7408 injunction process works.
Section 7407
“[Section] 7407, is part of a general scheme regulating the activities of
‘income tax return preparers’ and it allows injunctions to be issued for various
offenses by ‘tax preparers.’” United States v. Ernst & Whinney,
735 F.2d 1296,
1302 (11th Cir. 1984). Section 7407(b) provides:
In any action under subsection (a), if the court finds—
3
The defendants also argue that the district court erred in entering an injunction against
Village Tax because it was not named as a defendant. The defendants did not raise this argument
below, so they have waived our review of the issue. See In re Lett,
632 F.3d 1216, 1226 (11th Cir.
2011) (“Ordinarily an appellate court does not give consideration to issues not raised below.”
(quoting Hormel v. Helvering,
312 U.S. 552, 556 (1941))). In any event, this argument fails on
the merits. Agenord owned and operated Village Tax as a sole proprietorship. A sole
proprietorship is “[a] business in which one person owns all the assets, owes all the liabilities, and
operates in his or her personal capacity.” Sole proprietorship, Black’s Law Dictionary (11th ed.
2019). In a Florida sole proprietorship, “there is no entity apart from the individual.” Boyd-Scarp
Enters., Inc. v. Saunders,
453 So. 2d 161, 163 (Fla. 1st DCA 1984); see also Fla. Stat. § 440.02(25)
(In Florida, a “‘[s]ole proprietor’ means a natural person who owns a form of business in which
that person owns all the assets of the business and is solely liable for all the debts of the business.”).
An injunction against Village Tax, then, is the same thing as an injunction against Agenord herself.
And, as we explain below, the evidence established that an injunction against Agenord was proper.
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(1) that an income 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, [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,
the court may enjoin such person from further engaging in such
conduct. If the court finds that an income tax return preparer has
continually or repeatedly engaged in any conduct described in
subparagraphs (A) through (D) of this subsection and that an injunction
prohibiting such conduct would not be sufficient to prevent such
person’s interference with the proper administration of this title, the
court may enjoin such person from acting as an income tax return
preparer.
26 U.S.C. § 7407(b). Therefore, three things have to be proven before issuing an
injunction under section 7407: “first, the defendant must be a tax preparer; second,
the conduct complained of must fall within one of the four areas of proscribed
conduct, [section] 7407(b)(1); and third, the court must find that an injunction is
‘appropriate to prevent the recurrence’ of the proscribed conduct, [section]
7407(b)(2).” Ernst &
Whinney, 735 F.2d at 1303. If the court finds that the
defendant has continually or repeatedly engaged in unlawful conduct and that a
narrow injunction against that conduct will not be enough to stop the defendant from
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further interfering with the proper administration of the Internal Revenue Code, then
the court may enjoin the defendant from preparing all federal income tax returns.
The district court found that a permanent injunction against the defendants
from further tax preparation was warranted under section 7407. First, the district
court found that the defendants were “tax return preparer[s].” As “tax return
preparer[s],” the defendants prepared tax returns for compensation, owned and
operated tax preparation businesses, and hired and trained employees. See U.S.C.
§ 7701(a)(36). Second, the district court determined that the defendants:
(1) prepared tax returns containing incorrect credits and deductions, in violation of
26 U.S.C. section 6694(a) and (b); (2) failed to give their customers complete copies
of tax returns, in violation of 26 U.S.C. sections 6107(a) and 6695(a), (c); (3) failed
to identify themselves by their pin numbers, in violation of 26 U.S.C. sections
6109(a)(4) and 6695(c); and (4) concealed their fees from their customers. See
U.S.C. § 7407(b)(1)(A) and (D). Third, the district court found that, based on the
totality of circumstances, injunctive relief was necessary to prevent the recurrence
of such conduct. And fourth, the defendants “repeatedly and continually” engaged
in prohibited conduct listed in section 7407(b)(1) over the course of six years. Based
on the “history of the defendants’ actions” and their “longstanding[,] repeated[,] and
flagrant disregard for the law,” a narrower injunction would not work, the district
court concluded, because the defendants would continue to violate the tax laws.
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Section 7408
Under section 7408, if the court finds:
(1) that the person has engaged in any specified conduct, and
(2) 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.
26 U.S.C. § 7408(b). Section 7408’s “scope of prohibitable conduct is broad, and
should be construed towards achieving [its] purpose . . . to penalize promoters of
abusive tax shelters and other abusive tax avoidance schemes.” United States v.
Stover,
650 F.3d 1099, 1112 (8th Cir. 2011) (internal quotation marks and citations
omitted).
As relevant here, “specified conduct” is “any action, or failure to take action,”
which is subject to penalty under section 6701. 26 U.S.C. § 7408(c)(1). Section
6701(a) imposes a penalty on any person who knowingly aids and abets others in
underreporting their tax liability. 26 U.S.C. § 6701(a). The penalty applies
regardless of whether the person committed the act himself, “order[ed] (or otherwise
caus[ed]) a subordinate to do [the] act,” or “kn[ew] of, and [did] not attempt[] to
prevent, participation by a subordinate in [the] act.” See
id. § 6701(a) and (c).
The district court found that the defendants “clearly” violated section 6701
through their actions and the actions of their employees:
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[T]he defendants aided, assisted[,] and prepared returns that created
erroneous deductions, false education expenses, fuel excise tax credits,
among others. These actions were intended to and did illegally boost
customer refunds from which the defendants profited. Because these
false claims reduced customer’s tax liability they related to a material
matter. . . . [A]s both defendants testified to, they knew the actions
would understate their customers’ liabilities, that it would inflate their
refunds and would lead to higher fees for them because of the sheer
volume. The testimony of the witnesses, including all the customers
who testified demonstrated—even the defendants’ own testimony
demonstrated––the defendants knew precisely what they were doing.
And based on the recurrent nature of the defendants’ violations of section 6701, the
district court determined that a permanent injunction barring the defendants “from
all activities related to tax preparation for others” was warranted under section 7408.
Agenord Repeatedly Violated the Tax Code
Against this background, we reject Agenord’s argument that the district court
wrongfully attributed Simon’s actions to her. 4 There is substantial evidence in the
record that Agenord, by herself, falsely claimed credits and deductions. Agenord
admitted that in 2012 and 2013 she underreported “a number of tax returns” by
4
Agenord also argues, for the first time in her reply brief, that the district court erred by
not considering the four traditional equitable factors when it entered its injunction. Because she
did not raise that argument before the district court and did not raise it in her initial brief, we will
not consider it. See Leedford v. Peeples,
657 F.3d 1222, 1258 (11th Cir. 2011) (Generally, “we
do not consider arguments raised for the first time on appeal.”); Big Top Koolers, Inc. v. Circus-
Man Snacks, Inc.,
528 F.3d 839, 844 (11th Cir. 2008) (“We decline to address an argument
advanced by an appellant for the first time in a reply brief.”). Even if we did, “[b]ecause section
7408 expressly authorizes the issuance of an injunction, the traditional requirements for equitable
relief need not be satisfied.” United States v. Gleason,
432 F.3d 678, 682 (6th Cir. 2005); see also
Ernst &
Whinney, 735 F.2d at 1301–03 (stating that, while the “traditional factors” of equitable
relief apply to section 7402(a), an injunction under section 7407 is governed by its statutory
requirements).
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wrongfully claiming fuel tax and education credits. Simon testified that in those
same years Agenord prepared his personal returns which falsely listed items of
deduction. An IRS agent testified that Agenord, while working for Simon
Accounting, prepared and filed “[a] large amount of false . . . tax returns that required
adjustments.” A client of Simon Accounting, Jean Alexis, testified that Agenord
completed his tax return for 2017 using a fictitious educational expense and student
loan interest deductions. While preparing Alexis’s return, Agenord never discussed
with Alexis whether he had attended school or had paid money to attend school for
the 2017 tax year. In fact, Alexis said he never had a student loan and paid for his
past schooling in cash. Alexis stated that any figure that represented a tax deduction
for an educational expense or student loan interest was false. Further, the
defendants––including Agenord––stipulated that they falsely claimed fuel excise tax
credits on over one-hundred returns for customers in 2017. The evidence shows that
Agenord repeatedly underreported taxes.
Simon Repeatedly Violated the Tax Code Warranting a Broad Injunction
Similarly, Simon’s argument––that the district court should have issued him
a narrower injunction––lacks merit. Under section 7408(b)(2), before a court may
enjoin a defendant from engaging in “[certain prohibited] conduct or in any other
activity,” it must first find “that injunctive relief is appropriate to prevent recurrence
of such conduct.” 26 U.S.C. § 7408(b)(2). Courts have taken a totality-of-the-
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circumstances approach in making this determination.
Stover, 650 F.3d at 1112.
The following factors are relevant to this inquiry: (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 non-recognition) 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. See id.;
Gleason, 432 F.3d at 683; United
States v. Estate Pres. Servs.,
202 F.3d 1093, 1105 (9th Cir. 2000); United States v.
Kaun,
827 F.2d 1144, 1149–50 (7th Cir. 1987).
Here, the evidence showed that: Simon caused the loss of millions in tax
revenue; as the return preparer and owner of Simon Accounting, he was responsible
for filing false returns; he willfully claimed credits and deductions that he knew were
false; he filed false returns for more than six years (2012-2019); and he has continued
to deny culpability and, even at trial, was shifting the blame to his clients. We agree
with the district court that the fact that Simon filed false returns for more than six
years, even after being told that the deductions were unsupported, made it more
likely than not that Simon would repeat his conduct if he was allowed to prepare
returns. See United States v. Hartshorn,
751 F.3d 1194, 1198 (10th Cir. 2014) (“For
injunctive relief to be warranted under [section] 7408, the government was required
to prove by a preponderance of the evidence that . . . an injunction was necessary to
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prevent recurrence of [unlawful] conduct.”). In light of the “broad” scope of
prohibitable conduct under section 7408,
Stover, 650 F.3d at 1112, the district court
acted within its discretion to permanently enjoin Simon from preparing federal
income tax returns. See 26 U.S.C. § 7408(b) (Once a court finds that a person has
engaged in unlawful conduct and injunctive relief is necessary to prevent recurrence
of such conduct, it “may enjoin [that] person from engaging in such conduct or in
any other activity subject to penalty under this title.”).
AFFIRMED IN PART AND DISMISSED IN PART.
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