2021 Louisiana Laws
Revised Statutes
Title 47 - Revenue and Taxation
§1574.2. Suit to enjoin certain preparers

RS 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.