From what I managed to understand
Lily basically made Tara so he could have someone attracted to his ass, while also using this sockpuppet as a means of getting Brittany to be more sexual with him and revealing some really creepy fetishes that Lily or may not have (including but not limited to dogfucking ("Tara" admitted to eating out a dog), incest ("Tara" if I remember well supposedly got kicked out of the house for fucking her younger sister), the lesbian fetish and even got some rape sprinkled in ("Tara" once admitted to raping a homophobic girl and this in turn caused the girl to come out as gay, yeah right) and who knows what other stuff that I cannot remember).
Brittany released many of the texts she had with this sockpuppet:
Other than that, he would also use her to defend himself on MLP forums?? I can't remember, and did so until it was revealed they shared the same IP address. Oh and her profile pic was some random pic from Google.
Afterwards Lily tried to cover the whole thing up by saying she got killed, then she came back to life, and then got arrested for child pornography I believe, but still had time to post stuff from jail . Eventually Lily just kind of stopped talking about Tara, and hoped that over the years people will just forget about her.
This is all I remember, tho fair warning I may have gotten some details wrong. Feel free to correct me.