United States of America v. Eaton
Filing
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ORDER GRANTING MOTION FOR PRELIMINARY INJUNCTION signed by Judge John A. Mendez on 6/6/11. (Mena-Sanchez, L)
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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UNITED STATES OF AMERICA,
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Plaintiff,
v.
THOMAS W. EATON, DDS,
Defendant.
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Case No. 2:11-CV-411 JAM-JFM
ORDER GRANTING UNITED STATES’
MOTION FOR PRELIMINARY
INJUNCTION
Upon motion of plaintiff, the United States of America, the
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Court makes the following findings of fact and conclusions of law
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and enters this preliminary injunction against Defendant Thomas W.
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Eaton, DDS (“Easton”):
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Legal Standard for Preliminary Injunction
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In order to obtain a preliminary injunction under Section
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7402(a) of the Internal Revenue Code (I.R.C.), 26 U.S.C., the
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United States must show that an injunction is necessary or
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appropriate for the enforcement of the internal revenue laws.
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Alternatively, this Court will issue a preliminary injunction upon
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a showing of either (1) a combination of probable success on the
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merits and the possibility of irreparable harm, or (2) that serious
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questions are raised and the balance of hardship tips in its favor.
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Findings of Fact
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1. Eaton is a practicing dentist in Ione, California.
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2. Eaton is holding himself out as the employer of the workers
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performing services for him and as a party liable for federal
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employment taxes and federal unemployment taxes related to
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those employees.
3. Since August 2001, the IRS had repeatedly warned Eaton that,
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as an employer, he is required to withhold trust fund taxes
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from wages of his employees, make timely federal tax deposits,
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file accurate returns, and pay any taxes due.
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4. Since 2001, Eaton has failed to consistently make timely
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federal tax deposits and consistently pay Form 941 employment
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taxes on the date they are due.
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5. Since 2001, Eaton has failed to consistently comply with the
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federal tax laws requiring him to withhold federal employment
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taxes from employee wages, to make federal employment tax
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deposits, and to make timely payments of federal taxes due to
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the Internal Revenue Service (“IRS”).
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Conclusions of Law
This Court finds that the Defendant is interfering with the
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administration of the internal revenue laws.
Defendant is
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violating I.R.C. §§ 3102, 3402, 6011, 6071, 6072, 6151, 6302 and
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7501.
The United States is likely to succeed on the merits in this
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case and will suffer irreparable harm if the Defendant is not
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enjoined now.
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injunction under I.R.C. § 7402(a) is necessary and appropriate for
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the enforcement of the internal revenue laws.
Accordingly, the Court finds that a preliminary
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Security
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The United States is not required to give security for an
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injunction under Federal Rule of Civil Procedure 65(c).
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Order
1. The Court ORDERS that defendant (individually and doing
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business under any other name or using any other entity), and
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his representative, agents, servants, employees, attorneys,
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and anyone in active concert or participation with him, are
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enjoined and restrained from failing to withhold and pay over
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to the IRS all federal payroll taxes, including federal income
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withholdings, FICA taxes and FUTA taxes, required by law;
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2. Further, the Court ORDERS Defendant to file with IRS Revenue
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Officer Leslie Fouche-Munoz (or whomever the IRS may designate
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in her stead) accurate and timely Employer’s Annual Federal
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Unemployment (FUTA) Tax Returns (Form 940) and Employer’s
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Monthly Federal Tax Returns (Form 941-M) and to send copies of
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such returns to counsel for the United States at the same time
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that they file the originals;
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3. Further, the Court ORDERS Defendant to segregate and hold
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separate and apart from all other funds, all monies withheld
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from employees or collected from others for taxes under any
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internal revenue laws of the United States and to deposit the
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moneys so withheld and collected in a separate bank account in
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trust for the United States no later than the same day that
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the paychecks, for which the moneys are so withheld and
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collected, are given or made available to the employees.
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the time of making such deposit in such separate bank account,
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Defendant is ordered to send by fax to IRS Revenue Officer
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Leslie Fouche-Munoz at (916) 974-5540 a receipt for each
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employment tax deposit and a completed worksheet showing the
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calculation for each deposit;
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At
4. Further, the Court ORDERS Defendant to file complete and
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accurate individual income tax returns (Forms 1040) with the
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IRS as they become due, to pay the tax reflected in those
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returns, and to send copies of such returns to counsel for the
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United States and IRS Revenue Officer Leslie Fouche-Munoz at
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the same time that he files the originals;
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5. Further, the Court ORDERS that Thomas W. Eaton, and every
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other person authorized to sign checks or otherwise make
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disbursements for him or his business, to file with IRS
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Revenue Officer Leslie Fouche-Munoz a statement within
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fourteen (14) days of the date this preliminary injunction is
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issued to the effect that
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a. They have read the preliminary injunction issued by this
Court, and
b. Each pay period, they will personally determine that all
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federal payroll taxes, including federal income
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withholdings, FICA taxes, and FUTA taxes, for each pay
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period after the date this preliminary injunction is
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issued have been fully paid to the IRS by certified or
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cashier’s check prior to signing checks or otherwise
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disbursing funds.
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IT IS SO ORDERED.
Dated:
June 6, 2011
____________________________
JOHN A. MENDEZ,
UNITED STATES DISTRICT JUDGE
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