An estimated 100,000 people reportedly bought tax breaks through the late, unlamented National Audit Defense Network. One by one, they continue to face the reckoning.
On Monday, it was Wayne and Nanette Risley's turn. The California couple lost their challenge in Tax Court; they are liable for about $11,000 in tax deficiencies and another $2,300 or so in penalties.
Here was the deal:
The Las Vegas-based National Audit Defense Network billed itself as a conglomerate of former Internal Revenue Service agents, enrolled agents, certified public accountants, and tax attorneys who could help U.S. taxpayers pay no federal income tax.
OK, the Las Vegas bit might have been the first clue that some funny game was afoot.
Anyway, the NADN informed participants that they could qualify for significant tax benefits by forming a Web site and then paying the NADN to modify the Web to comply with the Americans with Disabilities Act. Somehow, this was supposed to render the participants eligible for tax credits and deductions.
It didn't.
This article simply reiterates the IRS' dogma: Ignorance of the law is no excuse. Many of us DID study the law and the websites WERE legally created but the IRS changed the rules after the fact. The IRS allowed the fraud to continue for years, not warning consumers and not acting against these predators. The problem is that the hierarchy of the NADN committed fraud. They hid behind the corporate veil to let the consumers fend for themselves while they started all over at some other firm to perpetuate another fraud.
May they all rot in hell.
Posted by: Joe | December 01, 2009 at 07:23 PM