The Court of Appeals for the Fourth Circuit affirmed the district court's order issuing a permanent injunction against Kotmair and SAPF, barring them from continuing to promote their tax-evasion scheme. See United States v. Kotmair, 234 Fed.Appx. 65, 66 (4th Cir.2007) (per curiam). Unfortunately, however, some individuals who apparently purchased or otherwise obtained the materials set up other websites that continue to promote and/or sell the products.
SAVE–A–PATRIOT FELLOWSHIP, et al., petitioners, v. UNITED STATES.Case below, 234 Fed.Appx. 65. Petition for writ of certiorari to the United States Court of Appeals for the Fourth Circuit denied.
Without a customer list, it is unlikely that the government will identify each of Benson's customers who followed his advice before the statute of limitations has run. Benson will not be harmed by identifying his customers and it will serve the public interest for the government to receive a full list of Benson's customers, both to warn them of the falsity and ineffectiveness of Benson's claims, and to enforce the income tax laws. Production of Benson's customer list is also proper to monitor compliance with the injunction's requirement that Benson "mail . . . a copy of the injunction order to every person and entity to whom he sold or furnished the [Packages]." See id. We note that this is not the first time a promoter of false tax schemes has been required to divulge his customer list. E.g. United States v. Bell, 414 F.3d 474, 485 (3d Cir. 2005); Schulz, 517 F.3d at 607-08; United States v. Kotmair, Civ. No. WMN-05-1297, 2006 WL 4846388 at *7-8 (D.Md. Nov.29, 2006), aff'd 234 Fed.Appx. 65, 65-66 (4th Cir. 2007); United States v. Harkins, 355 F.Supp.2d 1175, 1182 (D.Or. 2004); United States v. Stephenson, 313 F.Supp.2d 1054, 1061 (W.D.Wash. 2004).
See The Real Truth About Obama, Inc. v. Federal Election Com'n, 575 F.3d 342, 345-46 (4th Cir. 2009). Prior to The Real Truth About Obama, at least some courts within the Fourth Circuit dispensed with applying the traditional guidelines for equitable relief in determining whether to grant a permanent injunction pursuant to 26 U.S.C. §§ 7407 and 7408 because those statutes expressly authorize such relief. See, e.g., United States v. Kotmair et al., Civ. No. WMN-05-1297, 2006 WL 4846388, at *4 (D.Md. Nov. 29, 2006), aff'd, 234 F.App'x 65 (4th Cir. 2007); Abdo v. IRS, 234 F.Supp.2d 553, 564 (M.D.N.C. 2002) ("An injunction may issue without resort to the traditional equitable prerequisites if a statute expressly authorizes the injunction."), aff'd, 63 F.App'x 163 (4th Cir. 2003).
To obtain injunctive relief, the Government must additionally establish that an injunction is necessary to prevent recurrence of the conduct. I.R.C. § 7408(b); United States v. Kotmair, No. 05-CV-1297, 2006 WL 4846388, at *6 (D. Md. Nov. 29, 2006), aff'd, 234 Fed. Appx. 65 (4th Cir. 2007). As previously discussed, as part of the "claim of right" program, defendants advised customers to take improper deductions and prepared, advised or assisted in filing false or fraudulent income tax returns.