§1574.2. Suit to enjoin certain preparers
A. In a court of competent jurisdiction, the secretary may commence suit to enjoin
any preparer from further engaging in any conduct described in Subsection B of this Section
or from further action as a preparer.
B. In any action under Subsection A of this Section, the court may enjoin the
preparer from further engaging in any conduct specified in this Subsection if the court finds
that injunctive relief is appropriate to prevent the recurrence of this conduct. The court may
enjoin conduct when a preparer has done any of the following:
(1) Prepared any return, report, claim for refund, or other claim that includes a
substantial understatement of a taxpayer's liability due to a frivolous or fraudulent position.
For purposes of this Section, the following terms shall have the following meanings:
(a) "Substantial understatement" means a case in which the understatement of the
amount of tax payable or the overstatement of the amount of tax creditable or refundable
exceeds the greater of ten percent of the tax required to be shown for the taxable period on
the return, report, claim for refund, or other claim or one thousand dollars.
(b) "Frivolous position" means any position that is knowingly advanced in bad faith,
is patently improper, reflects a desire to delay or impede the administration of Louisiana tax
laws by using unreasonable, baseless, unsubstantiated or questionable facts or is identified
by the Internal Revenue Service as frivolous.
(c) "Fraudulent position" means any position taken with the intent to evade taxes or
that is a willful attempt to defraud or evade taxes that are due.
(2) Prepared any return, report, claim for refund, or other claim that includes an
understatement of a taxpayer's liability due to willful or reckless conduct. For purposes of
this Section, "willful or reckless conduct" shall have the same meaning as provided by
Section 6694 of the Internal Revenue Code.
(3) Negotiated a check issued to a taxpayer by the Department of Revenue without
the permission of the taxpayer.
(4) Engaged in any conduct subject to any criminal penalty provided in this Title.
(5) Engaged in any other fraudulent or deceptive conduct that substantially interferes
with the proper administration of the tax laws of the state of Louisiana.
C.(1) If the court finds that a preparer has engaged in any conduct described in
Subsection B of this Section and that an injunction prohibiting the conduct would not be
sufficient to prevent the person's interference with the proper administration of the tax laws
of Louisiana, the court may enjoin the person from acting as a preparer in the state of
Louisiana.
(2) The fact that the person has been enjoined from preparing tax returns or claims
for refund for the United States or any other state, in the five years preceding the petition for
an injunction, shall establish a prima facie case for an injunction to be issued pursuant to this
Section. For purposes of this Section, "state" shall mean a state of the United States, the
District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular
possession subject to the jurisdiction of the United States.
D.(1) For purposes of this Section, the term "preparer" shall mean any of the
following:
(a) Any person who prepares any return, report, claim for refund, or other claim that
is filed with the secretary of the Department of Revenue.
(b) Any person who owns or operates a business, the primary activity of which is the
preparation of any return, report, claim for refund, or other claim that is filed with the
secretary of the Department of Revenue, and employs one or more persons in such business.
(c) Any person who prepares a substantial portion of a return, report, claim for
refund, or other claim that is filed with the secretary of the Department of Revenue and does
not sign as the preparer, but rather has the taxpayer sign as if the return, report, claim for
refund, or other claim were self-prepared.
(2) Nothing in this Subsection shall be construed to include in the definition of
"preparer" either of the following:
(a) Any employee who prepares a return, report, claim for refund, or other claim for
the employer by whom he is regularly and continuously employed.
(b) An attorney or other tax advisor whose association with a return, report, claim
for refund, or other claim is limited to that of rendering advice to a taxpayer or preparer and
was not otherwise involved in preparing the return, report, claim for refund, or other claim
for which advice was rendered.
Acts 2018, No. 526, §1, eff. July 1, 2018.