Court Finds Tax Preparer in Contempt for Ignoring 2007 Ban
United States v. Hardy, No. 05-CV-2964 (S.D.N.Y. Oct. 28, 2025)
The district court held Kevin Hardy in civil contempt for continuing to prepare tax returns in violation of a 2007 permanent injunction barring him from return preparation activities.
Holding
The court found that Hardy willfully violated a clear and unambiguous 2007 injunction that permanently prohibited him from preparing federal tax returns. It granted the government’s motion for civil contempt and ordered Hardy to disgorge all tax-preparation fees earned since 2007, disclose client and financial records, and pay government costs and fees.
Why It Matters
Reinforces that permanent injunctions against tax preparers remain enforceable decades later.
Confirms that contempt can be established without proving willfulness.
Signals aggressive enforcement of preparer injunctions when evidence shows ongoing return preparation under alternate names or entities.
Demonstrates using payment app data, IRS PTIN records, and client testimony as corroborating evidence.
Timeline
1990: Hardy begins operating a tax preparation business in New York.
April 15, 2005: United States sues Hardy for promoting fraudulent “slavery reparations” credits.
April 16, 2007: The court entered a permanent injunction prohibiting Hardy from preparing tax returns.
2016–2024: IRS identifies over 9,000 returns filed under PTIN ending in –9531 associated with “Hardy.”
July 24, 2024: Government files motion to hold Hardy in contempt.
September 10, 2025: The court holds an evidentiary hearing; Hardy admits he has continued his tax preparation work.
October 28, 2025: Court issues contempt order and sets deadlines for disgorgement and disclosure.
Key Facts
Hardy operated under K & T Associates, LLC, using New York City and Mount Vernon addresses.
The clients paid $175–$250 per return via Venmo (“kevin-hardy-1”) and confirmed that Hardy prepared their returns post-2007.
IRS data linked over 9,000 returns to a PTIN connected to “Devone Hardy,” but client interviews and Hardy’s admissions established that Kevin Hardy performed the work.
Hardy used the same business addresses and email as before the injunction.
Evidence included Venmo transactions labeled “Taxes” and “2018 filed,” client emails, and LinkedIn listings showing continued ownership of K&T Associates.
Statutory or Regulatory Framework
The government sought enforcement under the court’s inherent civil contempt authority, supported by Second Circuit standards requiring:
A clear and unambiguous order.
Clear and convincing proof of noncompliance.
Lack of diligent, reasonable efforts to comply. Willfulness is not required for civil contempt. (Citing Marcel Fashions Group v. Lucky Brand Dungarees, Taggart v. Lorenzen.)
Arguments
Government argued:
The 2007 injunction was explicit and permanent.
Hardy continued to prepare thousands of returns, violating its plain terms.
Evidence from IRS PTIN data, Venmo, and client statements proved ongoing activity.
Contempt sanctions, disgorgement, and disclosure were necessary to enforce compliance.
Defendant argued:
The order only prohibited preparation related to the “slavery reparations” credit.
A separate individual (“Devone Hardy”) could have prepared the returns.
There was insufficient direct evidence connecting him to the later filings.
Court’s Reasoning
The 2007 injunction’s text was “clear and unambiguous,” permanently barring Hardy from any tax-return preparation.
Hardy negotiated and consented to that order, eliminating any ambiguity.
Government evidence was “clear and convincing,” including Hardy’s own admissions of continued preparation from 2019 to 2022.
Venmo, client testimony, and IRS PTIN data corroborated the violation.
Hardy did not act with “reasonable diligence” to comply; instead, he ignored the injunction for more than sixteen years.
Civil contempt was warranted to compel compliance and remedy the ongoing violation.
Forward-Looking Implications
Illustrates continued DOJ monitoring of previously enjoined preparers using modern payment and communication platforms.
Suggests practitioners subject to injunctions must avoid even indirect preparation or supervision activities.
Confirms that consent decrees remain enforceable indefinitely where jurisdiction is retained.
Highlights the government’s reliance on digital financial data to substantiate enforcement actions.
Result
Hardy was held in contempt of court. He must refund all income from preparing tax returns since 2007, submit his client list and bank records by November 10, 2025, and reimburse the government’s investigation costs. Failure to comply could result in additional penalties.
The Takeaway
Courts will enforce long-standing preparer injunctions through civil contempt when evidence shows continued activity, regardless of passage of time or alternate business names. Tax professionals under permanent injunctions remain subject to ongoing judicial oversight.
Citations
Marcel Fashions Grp., Inc. v. Lucky Brand Dungarees, Inc., 779 F.3d 102 (2d Cir. 2015) — Civil contempt standard
Taggart v. Lorenzen, 587 U.S. 554 (2019) — No willfulness requirement
Armstrong v. Guccione, 470 F.3d 89 (2d Cir. 2006) — Inherent contempt power
