United States v. Gleason

Daniel Gleason (defendant) provided tax-representation services individually and via two companies to more than 250,000 customers. Gleason promised that clients could deduct wedding, college, household, and other expenses on their federal income taxes by characterizing them as business expenses. However, Gleason did not advise clients that only ordinary and necessary business expenses were deductible and that the Internal Revenue Service (IRS) closely scrutinized and often rejected taxpayer attempts to use the tactics that he suggested. Additionally, Gleason misrepresented his professional qualifications, experience, and purported successes with tax disputes and audits. In April 2003, the United States sued Gleason and his companies. In February 2004, the district court permanently enjoined Gleason from engaging in certain misrepresentations. Gleason did not appeal this injunction. In June, the district court denied the United States’ request for a permanent injunction barring Gleason from acting as a tax preparer because doing so would prevent Gleason from earning a livelihood. In August, the district court permanently enjoined Gleason from selling or promoting his Tax Toolbox product or serving Tax Toolbox customers. Gleason appealed the August injunction, arguing that it overly burdened his ability to earn a living. However, (1) the Tax Toolbox was a small part of Gleason’s practice, (2) Gleason sold the Tax Toolbox for only three years, (3) Gleason sold the Tax Toolbox only to customers who already operated small businesses, and (4) Gleason provided tax-preparation services to many entities even after the Tax Toolbox’s demise.