In April 2017, the government alleged Cotton and her business used a variety of tools to inflate client tax refunds and in November that year they were permanently enjoyed from violations and were allowed to continue to prepare returns with restrictions.
Cotton was require to hire a neutral monitor to monitor compliance.
The court held Cotton and Professional Accounting in contempt of the 2017 order in August 2019 and imposed additional limits. This included limiting the number and type of returns they could preparer with the warning that this was a last chance for the defendants.
The court issued a second contempt order on January 27, finding the defendants tried to circumvent the terms of the injunction and violated instruction finding “any remedy short of a permanent injunction on return preparation is inadequate.”
Cotton and Professional Accounting are prohibited from selling customer lists to certain non-party individuals or entities as the court said such sales could be an circumvent orders. Those parties were Anthony Boone, Donellar Wims-Boone, Latesha Temple, Melissa Morgan-Wright, Kelly Dunlop, Matthew Dunlop, Richard Wise, Professional Accounting by R&K, Professional Accounting by MM, and Temple Financial Solutions.
The court held Cotton referred customers to Temple Financial Solutions, formed by Temple for which Boone preparer returns; to Professional Accounting by MM, founded by Morgan-Wright; and to Professional Accounting by R&K, which was organized by Wise and Kelly Dunlop. All of these had worked for the defendants and Wise was a former customer. The three companies all operated out of Professional Accounting’s offices.