Court bars Texas tax preparer from filing returns during 2026 season
United States v. Ajuma, No. 4:24-CV-890-Y. 2025 BL 465516.
A federal court temporarily barred a Texas tax preparer from preparing returns for others after finding repeated, long-running misconduct that IRS penalties failed to stop.
Holding
The court granted the government’s motion for a preliminary injunction prohibiting John T. Ajuma from preparing federal tax returns for others during the 2026 filing season.
Why It Matters
Courts can sidestep the traditional injunction test when Congress expressly authorizes injunctive relief in the tax code.
Repeated improper credit claims and fabricated deductions can justify a full preparer ban, not just narrower conduct limits.
Prior IRS penalties under due diligence rules weigh heavily in favor of injunctive relief.
Blaming clients does not protect preparers from liability for unreasonable or knowingly false positions.
Timeline
2010: Ajuma begins preparing tax returns in the Dallas–Fort Worth area.
2012: Ajuma opens a tax preparation business, later known as Momentum Tax Express.
Multiple years: IRS assesses penalties under §6695(g) for failure to meet due diligence requirements.
September 19, 2024: United States files suit seeking injunctive relief.
After the 2025 filing season, the Government moves for a preliminary injunction.
December 23, 2025: Court grants the preliminary injunction.
Key Facts
Ajuma operated a tax preparation business in Hurst, Texas.
The IRS repeatedly warned him that the returns he prepared appeared fraudulent.
The government identified numerous returns claiming:
Residential energy credits without eligibility.
Fabricated Schedule C business expenses.
Improper Form 2106 deductions for ineligible employees.
Invalid income adjustments on Schedule 1.
Ajuma had already been penalized twice for failing to exercise due diligence in claiming credits.
Statutory or Regulatory Framework
§7407 authorizes courts to enjoin tax return preparers who repeatedly violate preparer penalty provisions.
§7408 authorizes injunctions against conduct subject to §6701 penalties, which apply to knowingly assisting tax understatements.
§6694 penalizes unreasonable or willful understatement of tax liability by preparers.
§6695(g) penalizes failure to meet due diligence requirements for certain credits.
Arguments
Taxpayer argued:
Clients were responsible for false positions because they signed their returns.
IRS publications could not establish binding tax law.
Certain disputed positions were supported by older case law.
Government argued:
Ajuma repeatedly claimed credits and deductions with no reasonable basis.
He ignored basic due diligence obligations.
Prior penalties failed to deter continued misconduct.
A preparer ban was necessary to protect the tax system.
Court’s Reasoning
Congress explicitly authorized injunctive relief under §§7402, 7407, and 7408.
The government only needed to meet statutory criteria, not the traditional equitable test.
Ajuma repeatedly violated §6694 by taking unreasonable positions that understated the tax.
He violated §6695(g) by claiming credits without any meaningful inquiry.
Misrepresenting the tax law to clients does not excuse preparer liability.
The misconduct spanned multiple years and many returns.
Ajuma showed no recognition of wrongdoing, making narrower relief insufficient.
Forward-Looking Implications
Preparers with repeated due diligence penalties face a real risk of court-ordered shutdowns.
Courts may impose complete preparer bans when compliance warnings and penalties fail.
Reliance on outdated or irrelevant authority will not shield preparers from injunctions.
IRS enforcement actions against preparers continue to focus on credit abuse and fabricated deductions.
Result
The court granted a preliminary injunction barring Ajuma from preparing tax returns for others during the 2026 filing season.
The Takeaway
When a tax preparer repeatedly claims fake credits and deductions and ignores prior IRS penalties, a court can step in and shut the business down, at least temporarily, to protect the tax system.
List of Citations
§6694: Core liability provision and most frequently relied-on authority, establishing repeated unreasonable and knowingly false return positions.
§7407: Primary enforcement statute used to justify a full tax preparer ban based on those §6694 violations.
§6695(g): Supporting authority showing repeated due diligence failures and ineffective prior penalties.
§7408 and §6701: Backstop provisions confirming knowing assistance in tax understatements.
United States v. Ajak and United States v. Umbrella Financial Services: Structural cases explaining why statutory injunctions apply and why narrower relief was insufficient.