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United States v. Guan

IN THE UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION


November 18, 2009

UNITED STATES OF AMERICA, PLAINTIFF,
v.
SUSAN GUAN, INDIVIDUALLY, AND SERVICES, INC. SRN FINANCIAL SERVICES, INC., DEFENDANTS.

The opinion of the court was delivered by: Valerie B. Fairbank United States District Judge

Order of Permanent Injunction Against SRN Financial

Plaintiff United States of America and defendant SRN Financial Services, Inc. ("defendant"), stipulate as follows:

Defendant waives the entry of findings of fact and conclusions of law under Rules 52 and 65 of the Federal Rules of Civil Procedure.

Defendant understands that this Stipulated Judgment of Permanent Injunction constitutes the final judgment in this matter, and waives any and all right to file an appeal from this judgment.

Defendant consents to the entry of this Stipulated Judgment of Permanent Injunction without further notice and agrees to be bound by its terms. Defendant further understands and agrees that the Court will retain jurisdiction over this matter for the purpose of implementing and enforcing this injunction, and understands that if it violates this injunction, it may be found to be in contempt of court and may be sanctioned. The parties agree that entry of this permanent injunction neither precludes the Internal Revenue Service from assessing penalties against defendant for asserted violations of the Internal Revenue Code ("IRC"), nor precludes defendant from contesting any such penalties.

ORDER

IT IS HEREBY ORDERED pursuant to 26 U.S.C. §§ 7402, 7407, and 7408 that defendant SRN Financial Services, Inc., and its representatives, agents, servants, employees, attorneys, independent contractors, anyone in active concert or participation with him, are PERMANENTLY ENJOINED from directly or indirectly;

(1) Preparing or filing, or assisting in, or directing the preparation or filing of any federal income tax return, amended return, IRS Form 1099, 1099-OID, 1096, Schedule B, or any other tax-related documents or forms for any other person or entity;

(2) Engaging in any other activity subject to penalty under the Internal Revenue Code; and

(3) Engaging in other conduct that substantially interferes with the proper administration and enforcement of the internal revenue laws;

(4) Organizing or selling tax shelters, plans or arrangements that advise or assist taxpayers to attempt to evade the assessment or collection of such taxpayers' correct federal tax;

(5) Engaging in any other activity subject to penalty under 26 U.S.C. § 6700, including organizing or selling a plan or arrangement and making a statement regarding the excludability of income or securing of any other tax benefit by participating in the plan that defendant knows or has reason to know is false or fraudulent as to any material matter;

(6) Engaging in any other activity subject to penalty under 26 U.S.C. § 6701;

(7) Directly or indirectly organizing, promoting, marketing, or selling any plan or arrangement that advises or encourages taxpayers to attempt to violate internal revenue laws or unlawfully evade the assessment or collection of their federal tax liabilities, including promoting, selling, or advocating the use of the "commercial redemption" theory and false Forms 1099-OID based on the false claims that:

i. Taxpayers can draw on the Treasury of the United States to pay their tax debt or other debt using IRS Forms 1099, 1099-OID, Schedule B, tax returns, or other false IRS documents;

ii. Taxpayers can issue false Forms 1099-OID on behalf of a creditor and report the amount on the false Form 1099 as federal income taxes withheld on their behalf; and

iii. Taxpayers have an account with the Treasury Department from which they can draw funds through a process that is often called "redemption" or "commercial redemption";

(8) Preparing its own federal income tax returns or amended returns claiming false income tax withholding and refunds, whether or not they are based on amounts shown in false Forms 1099-OID issued to creditors, false Forms Schedule B, or other IRS forms or documents;

(9) Otherwise aiding and abetting the filing of frivolous Forms 1040, 1040X, 1099, 1099-OID, and Schedules B for itself or others; and,

(10) Representing anyone before the IRS.

IT IS FURTHER ORDERED that defendant within 10 days contact by mail (and also by e-mail, if an address is known) all persons who have purchased any products, services or advice associated with the false or fraudulent tax scheme described in this order, enclosing a copy of the injunction against defendant, and file a certificate with the Court within 14 days stating under penalty of perjury that it has done so.

IT IS FURTHER ORDERED that defendant provide to counsel for the United States within 10 days a list of all persons for whom it has prepared federal income tax returns, amended returns, or other tax-related documents, and all persons who have purchased any products, services or advice from defendant, since January 1, 2006.

SO ORDERED this 18 day of November, 2009.

20091118

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