Chris Tulino

Thanks for the new thread, Chris.
I too was a customer in 2001 and cut my losses after the one so called modification. Our 2002 returned had us paying about $2600 in taxes due to the bogus 1099 from G&J Eagle Enterprises. So if and when the IRS gets to our file, the bite is not going to hurt as much. I really feel for the ones that had faith and trust in what they were told and sunk so much more into this scam.

Oryan is still sending out those email alerts - and acting as if that none of this has been their fault. They even have the audacity to suggest that if the IRS says that the promissory notes are moot then they "may" be required to write 1099 for them. Give me a break! How can you write out a 1099 for income that no one received (re: the promissory note)? Their scam continues!!!!

Latest Crapmail BS from Oryan
Still playing people for fools.

Dear Mall Owners:

We appreciate the many emails we have received in response to our previous emails to you. We are reviewing them daily and comprising a list of issues to address in our communications to you. The volume of NADN post bankruptcy calls and emails continues to be so high that we cannot respond individually.

The hot topics continue to be refunds, promissory notes, and your tax documents sent to NADN. Hopefully, the message we passed on to you from the NADN Bankruptcy Trustee, Biff Leonard, will answer questions regarding you tax documents and other issues.

Regarding promissory notes, we still need to know the outcome of the appeals cases, whether or not the IRS will require us to send Form1099's to each mall owner for the balance due under the notes should they be cancelled, and what impact this will have for those mall owners who claimed and were allowed the tax credit on their federal return(s). Oryan is committed to satisfying the promissory note issue in whatever manner is deemed to be in the best interest of the mall owners. While waiting for these issues to be settled, Oryan has stopped accruing interest on the note balances and has stopped applying a portion of the commissions to the note balances.

Oryan will not be making refunds. It is our objective to continue working with and supporting mall owners in generating revenue from their Internet Shopping Malls. The new release (next week) will be extremely beneficial and profitable to you with new features and additional ways to earn money. It is truly the best shopping mall business opportunity on the Internet.

ISSUES FROM CURRENT EMAIL
-------------------------------------------

Sites going inactive: A few mall owners found that their site was inactive. The back office was live but not the shopping mall with their unique PIN. This problem has been fixed and should not reoccur.

PIN CHANGING: This has been extremely frustrating to both mall owners and to Oryan technical staff. A shopper viewing and shopping on a mall owner's site (ex; 12345) finds that he/she has been switched to another mall owner site (ex: 91435) after clicking on sub pages of the site. We believe this problem is fixed in the new release that will be out next week. However, there may still be problems for users who have cookie blockers turned on or who are running security software that blocks cookies. There are some aspects of the shopping mall software that require the use of cookies. We now need to monitor and analyze the use of the new release before making any further decisions.

HITS NOT CONVERTING TO SALES: Many of you have purchased packages that claim they will result in an increase in potential shoppers to your site and therefore the potential of additional sales and commissions. Oryan is not able to evaluate the working and the performance of the individual packages. Using a server package, called Web Trends, we are able to monitor the incoming traffic. We do know that there has been a significant increase in traffic to Mallforall and Shopn2000 since mall owners began purchasing traffic packages. The bad news is that 70% of that increase, approximately 8,000 hits per day, stay on the shopping mall for about one second. It appears that they are not bonified shoppers and may be computer generated clicks. We also know that many of the 8,000 additional hits to the shopping mall are coming from off shore.

Oryan reiterates that Internet marketing of your shopping mall business (creating hits) can be extremely profitable. We continue to advise you to learn about marketing strategies and we still believe that the website www.wilsonweb.com is a good place to start. You also can learn a great deal about key word marketing by visiting www.overture.com and www.adwords.com.

HITS PAYING DOWN PROMISSORY NOTE BALANCE: We are aware that some mall owners are being solicited to purchase traffic packages and are being told that hits through these packages will pay down the promissory note. This is completely untrue. On a similar note, some mall owners are being solicited to pay $199 to have their note liquidated. That too is false. None of these solicitations are from Oryan and are to be viewed with extreme caution.

UNSIGNED DOCUMENTS: Some mall owners are questioning whether or not they have a promissory note if they did not sign and return the documents sent to them after making cash or credit card payment to NADN. The answer in this case is "no." If you did not sign the documents, as far as Oryan is concerned, you do not have a promissory note.

MALL COMMISSIONS: Oryan has been paying mall owner commissions quarterly. The last checks were sent out in March, 2004. We are currently calculating commission reports from Linkshare and will be issuing checks next week

Support

Another Aside: I meant to include above that if the IRS determines that this mall business is NO business (pun intended) than how in the world cna Oryan think that they will be required to issue 1099s for the promissory notes????

I think that Bagdad Bob has been hired to be the spokesman for Oryan.

Does anyone know if I need to file the customer claim form if I am just trying to get the refund I feel they owe me and they say they don't?

Dianna-M0108,

Which customer claim form are you asking about, and which "they" do you mean?

This must be one great out of control cd!!!

http://www.mallforall.com/SearchResults.aspx?s=72

I'm buying the Out of Control CD with all of my commissions from Mall4all/ShopN2million. After the promissary note is paid of course. Does this CD come with those rugged roadies or do I just have to fantisize? I'm kinda fantisized out, what with thinking I've got an online mall&all.

Reminder about Class Action Lawsuit --

If you have not joined our "Class Act Legal Cooperative" group but would like to join us and would like an overview of the situation sent to you automatically, please send an email to opaobie@opaobie.com with NADN-Oryan-Overview in the subject. You will be added to the list and will receive an overview of the situation (and a free gift if you read all the way to the bottom of the email you receive). This does not obligate you to anything. If and when we proceed with the lawsuit, you will be given an opportunity to participate or decline.

You may also contact me through my website link (just click on my username and then click on the "Contact Us" button and fill in the form). If you put CALC in the comments section, it will be filtered to my "Class Act Legal Cooperative" folder. Same goes for just sending an email to me. Put CALC in the message or subject.

If you wish to contribute to the legal fund, visit my site and click on the "Make a Donation" button.

Opaobie
On the other christulino website someone, it may have been you, gave this web site address http://www.nvb.uscourts.gov/
they also mentioned customer claim forms. If you go to this site it is the United States Bankruptcy Court District of Nevada and that is where they have the form. So can we use these forms to get more then just the paperwork back?
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Read the Mall Update #5 from Oryan. It explains what you are asking. Here it is again in case you didn't receive a copy. If you can't find the claim forms at the site listed below, email me and I will send them to you. Links to download them are in the Overview letter I have sent to everyone who has joined the group preparing for the class action lawsuit, so if you have that letter from me, you will find the link to download the forms.
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There are two issues: Proof of Claim as a Creditor against NADN in the Bankruptcy proceedings, and return of documents. File a Proof of Claim to be listed as a creditor to have money returned for services or products you either didn't receive from NADN or that you feel were inferior and you want a refund or you feel you were sold under fraudulent or false or misleading circumstances.
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Return of documents you sent to NADN for tax preparation is being handled as explained in the court's letter below.
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To all associated with NADN.

We have established the court website at www.nvb.uscourts.gov to provide updates to all of you. Please check that website frequently. We are also setting up a "hotline" to provide answers to questions, however, that hotline is not yet in operation. That number will be 702-730-2033.

NADN was operating under Chapter 11 of the Bankruptcy Code since June 10, 2003. On May 27, 2004, the company converted the case to one under Chapter 7 (liquidation).

MEETING OF CREDITORS
A meeting of creditors is scheduled for July 8, 2004 at 4:00 PM at the Federal Courthouse, 333 Las Vegas Blvd South, Las Vegas, NV. The debtor~s representative must be present at the meeting to be questioned under oath by the trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice.

DOCUMENTS AND WORKING PAPERS
Many customers provided financial information in the preparation of those tax returns in form of canceled checks, prior year tax returns, and other documents. We will make every effort to return those documents to you. We hope to have procedures in place by the end of June. The proposed procedure is to charge an administrative and handling fee, to be determined, to locate documents and return them to you. Please check this website regularly to obtain your documents.

AUDIT DEFENSE
No support is currently available for audit defense. You are advised to contact a tax attorney to assist you in an ongoing audit.

PROOF OF CLAIMS
A proof of Claim is a signed statement describing a creditor~s claim. If you do not have a proof of claim form, you can obtain one at any bankruptcy clerk~s office or at www.nvb.uscourts.gov. If you do not file a Proof of Claim by the ~Deadline to File a Proof of Claim~ listed above, you might not be paid any money on your claim against the debtor in the bankruptcy case. To be paid you must file a Proof of Claim even if your claim is listed in the schedules filed by the debtor corporation. The claims bar date is October 6, 2004. IF YOU HAVE ALREADY FILED A PROOF OF CLAIM, PLEASE TO NOT FILE A DUPLICATE CLAIM.

Please do not contact the Bankruptcy Court, the Office of the United States Trustee, the Clerk~s office or the Trustee regarding tax returns or audits.

-------
William A. Leonard, Jr.
5030 Paradise Road, B216
Las Vegas, NV 89119

Chapter 7 Panel Trustee
District of Nevada

From the Las Vegas Sun June 30th News Briefs... http://www.lasvegassun.com/sunbin/stories/sun/2004/jun/30/517103247.html?National Audit Defense

"Injunction hits NADN workers

Former executives and employees of the now defunct National Audit Defense Network have been enjoined from continuing to sell what federal prosecutors call tax scams.

An order entered by U.S. District Judge Lloyd George this week approves a preliminary injunction against some of the principals behind the Las Vegas-based telemarketing company that closed its doors and moved to convert a 2003 bankruptcy filing to a liquidation on May 26.

The order comes after a Justice Department motion claiming that former executives and employees of the company were illegally using NADN's customer list and database, "and are continuing to scam customers through other entities."

The order grants injunctions against ALR Inc., Lee Panelli, Jeff Klingenberg and Ric Klingenberg."

For anyone who has already refiled their taxes - do we need to include the 1099 we received pertaining to the clicks. Hopefully I will get all of the forms that I need before the deadline. I am having trouble getting the tax form from my mortgage company. I am afraid to find out how much I am going to have to pay .

bev

For anyone who has already refiled their taxes - do we need to include the 1099 we received pertaining to the clicks. Hopefully I will get all of the forms that I need before the deadline. I am having trouble getting the tax form from my mortgage company. I am afraid to find out how much I am going to have to pay .

bev

Bev...Has the IRS contacted you? Was your taxes prepared by NADN? NADN did not prepare my taxes and the IRS has not formally contacted me, I am not doing anything. A lot of dynamics are going on right now. From what I read, I'm believe that the only ones the IRS are interested in are the ones that had their taxes prepared by NADN. I also believe that from what I've read from the Justice Departmen is that the 1099s cut from G&J Eagle Enterprises are bogus. Have patients and wait for further developments. I was very nervous when this all came to a head last month, but I'm now going to take a wait and see posture.

I will be prompting the lawyers again this evening, but it appears they may be waiting to see how the NADN bankruptcy and the DOJ case against NADN and Oryan et al proceed. I urge those of you who have offered to help find legal counsel to proceed with renewed urgency. There are several interrelated issues to be decided, and how the outcome will affect us is impossible to predict.

We may be allowed to continue to operate the malls without the ADA credits but with tax credits allowed for any legitimate online business. It seems very remote that Oryan can make modifications to the malls to meet the requirements of the ADA, so the value of the business has dropped considerably. The failure of the malls ever to generate profits anywhere close to those promised by Oryan is also evident. For anyone wanting to terminate the contract, a means to do so without having to pay off the promissory notes has to be defined by the court. That leaves the issue of the promissory notes to be determined. The DOJ has claimed they are bogus, but until a court decides that, they are still valid. If the sites are shut down and declared illegal, we have a right to demand a refund of our downpayments and voiding of the promissory notes.

Refund of tax credits taken in the past under the ADA is an issue with serious consequences, is complicated, but still allows us to argue that we took those credits based on information provided by tax experts at NADN, and NADN should be forced to refund the tax credits to the IRS or pay clients as they guaranteed under the audit protection we purchased. Since NADN is being liquidated, the back taxes should come from their assets to the extent the assets allow and the rest written off, just as we are expected to write off that portion of our claims against NADN that we will never receive. If we must repay them, we should be allowed to deduct all our losses for services and products from NADN, and if we are unable to obtain a refund of the mall downpayments and relief from the promissory notes, deduct those costs, too. The IRS will argue that we received the refunds, they should not have been allowed, and we must pay them back. We can argue that we took those credits based on advice from recognized tax experts, so they should be liable for paying them, not us. The IRS may even demand interest and penalties, but we could certainly appeal the interest and penalties. As you can see, the arguments and rebuttals are complicated. That is why we are trying to obtain legal counsel as soon as possible. We may need both a class action lawyer and a tax lawyer before this mess is settled, so anyone who has access to either or both of those kinds of lawyers, feel free to try to bring them onboard.

Until I am contacted by the IRS, I plan to take no action. Each of us must decide that on his own, so advice from a tax lawyer may be in order to avoid having to pay interest and penalties. The problem with amending returns before all these issues are resolved is, the amended returns will probably be incomplete or inaccurate since the issues being resolved affect the amended returns, too.

Stay in touch, and let me know if you hear from the IRS or the DOJ or any of the courts, and let me know if you find a lawyer who will take on this class action.

Nadn has prepared my taxes for the years 2001-2002. I send them my information to prepare my taxes for this year but they were not done. I am trying to get my information together to have my taxes done for this year. I think I will wait to redo my taxes for 2001-2002 but I do need to do this years taxes. I am just not sure if we put the 1099's on it.

bev

In reply to questions and comments I have received, I thought I would share my reply.

We will just have to see what the court squeezes out of NADN, most likely a few cents on the dollar at best, and evenly divided among all of us. Everyone affected should file a Proof of Claim form. The finding of the court will complicate our 2004 returns because some if not all of the proceeds may be a return of money spent this year, such as the Keyword Gold hit generators. Anything you don't get back that you spent this year should be deducted as a business expense for the 2004 return.

Our primary defendant in the class action lawsuit is Oryan -- and all of their partners still standing --, and they have not filed for bankruptcy protection. They do have million$$$ in assets, so there are lawyers willing to take this on. We are also building a legal fund -- a few bucks each from thousands of people can be substantial. You might want to mention this point to any lawyer you contact. At the time of purchase, we were offered our own mall, not a share in ONE site, so the fact that only one actual site exists appears to be a breach of contract by Oryan. We only discovered after the fact that none of the "malls" ever worked -- except for Oryan and NADN --, yet Oryan keeps sending out "updates" claiming they are "correcting" all of that. The DOJ injunction(s) may stop them from modifying the mall(s) at all, thus rendering them completely worthless. This is all part of our position for the class action lawsuit and our claim that Oryan has breached the contract by never performing to contract and now being rendered unable ever to do so, but we need to follow the process to its conclusion since part of our claim against having to pay back all the tax refunds is that these were purchased on advice from TAX EXPERTS at the highly reputed NADN as legitimate business sites that were CONTRACTED FOR and PAID FOR with real money to be modified to comply with the ADA provisions AND generate revenue, and we fulfilled our part by obligating ourselves for future modifications by signing promissory notes. All of that carries with it implied warranties that vary from state to state, but in all cases, it is proof admissible in court that we exercised all prudence prior to purchasing the malls and prior to filing our tax returns. Some at the DOJ may call us "greedy" or "tax-cheaters" and may not work diligently to protect our rights, but I believe the facts stated above disprove that slander.

We claimed tax credits under the ADA based on professional tax advice that we PURCHASED from a highly reputed NADN, which was backed up by an audit protection policy from NADN and which will now NOT be honored by NADN. That alone demonstrates we exercised prudent judgment, and until the IRS makes a final ruling and notifies each of us in writing that the malls fail to meet the guidelines, we still do not know for fact that they don't. Both NADN and Oryan filings and statements can be used to counter that finding, and even if denied, they bolster our position of acting in good faith and in taking every reasonable precaution before filing our tax returns. If we file for an extension, what do we use as justification, and how do we determine the actual tax owed? If the bankruptcy denies us any means to recoup our losses, then the IRS should allow us to deduct them as business expenses in calculating taxes owed before filing amended returns. That is why I believe I should do nothing yet, and that will be my argument if the IRS tries to impose penalties and/or interest. I honestly don't know what to put on an amended return or what to argue in requesting an extension for anyone who has not yet filed a 2003 tax return. Keep checking the bankruptcy court site and looking for notices from the Trustee concerning return of tax documents so you can file your taxes if you haven't done so or need to file an amended return. I can't emphasize enough that you MUST file a Proof of Claim form to make sure you are on the list of creditors AND so you will receive notices from the court and the Trustee (unless Oryan retransmits them as they receive them).

The courts and the IRS will have to resolve all of these matters, but surely they can't deny us legitimate business deductions for money we actually spent to purchase and advertise our malls and then force us to pay taxes on revenue from those malls which we never received and that was "allegedly" applied to promissory notes which the DOJ now claims are invalid. If we have to pay back the tax refunds that resulted from claiming the ADA tax credits, I will fight them in court to allow deduction from those refunds of all losses and expenses associated with the malls and the products and services purchased from the bankrupt NADN. They have a paradox to resolve, so keep the faith.

...I don't know anybody who plans to keep the mall after this is settled.

I just found this that was posted over at the IRS site http://www.irs.gov/businesses/small/article/0,,id=106472,00.html

it sounds like it might be good news for us.

bev

Please read this finding from the IRS regarding "Misuse of Disabled Access Credits". If nothing else, it certainly adds tremendous clout to our case against Oryan. I find several of their points insulting and open for rebuttal, but that is for the lawyers to argue. Expect an "update" from Chung Phan (Chris) Oryan Management Support anytime now.

http://www.irs.gov/businesses/small/article/0,,id=106472,00.html

Bev,

Thanks for bringing this to our attention.

Opaobie, what do you think about this statement from the IRS link above-
Persons who have participated in transactions similar to those described and who believe they have incorrectly taken a credit and/or a related business deduction should file an amended return. If the amended return results in additional tax owed, interest and penalties will generally also be due. However, voluntarily amending a return may result in a smaller amount of penalties and interest than if a person does not amend their return and is audited by the IRS. For additional guidance on amending returns, seek the advice of a trusted tax professional, call the IRS at 1-800-829-1040, or see Amended/Corrected Tax Return Frequently Asked Questions.

They make no mention of waiting to see the outcome
of this mess before we refile. I'm thinking it is
best to wait, but reading this could make one think twice.

http://www.irs.gov/businesses/small/article/0,,id=106484,00.html

explains so much.

http://www.reviewjournal.com/lvrj_home/2004/Jun-11-Fri-2004/business/24080790.html

sounds like they are going to find us anyway, we may as well file an ammended return :(

I have the claim form, but can't find where to send it. Anyone have an address?

If you mean the Proof of Claim form for the NADN bankruptcy, the address is on the form and also posted on the first page of this comments forum and on the bankruptcy court site (posted above) and is in the Overview letter I send to anyone who emails me (as posted above).

Voluntarily filing an amended return is always a good faith act and is usually viewed favorably by the IRS. Unfortunately, we don't have enough information to amend them and won't have until the NADN bankruptcy findings are in. We may have to account for money returned, and there are legitimate expenses associated with the products and services purchased from NADN that should be claimed, but the IRS seems to think NOTHING we spent on the malls or advetising them or anything we bought from NADN is deductible. That needs to be contested, and only a tax lawyer can give good advice on that issue. The same goes for money spent to purchase products and services from Oryan, so all I can say is, consult a tax lawyer or call the IRS (probably won't get a good answer since they are wrong 80% of the time according to polls that have been conducted). We are trying to get both a class action lawyer and a tax lawyer to represent us, but each of us must decide whether we want to amend now and reduce the risk of an audit or wait and contest any interest and penalties assesed in the future.

I would just like to say that since I am one of the people who received a questionaire from the IRS that it is very likely they will audit me, if not already doing so. I haven't heard back from them yet. I do not understand the IRS postion on not allowing any business expense deductions on any of our returns, or even allowing a deduction for the "theft" deduction. I can only appeal to all involved in this to please send a donation, even a small one, to help file the class action and find a very good tax attorney who can help us with the IRS. If everyone (100,000) people were to send in at least $10, that would be a cool million to pay the attorneys. I wonder how we can get the list of 100,000 that is being purported?

Anyway, my comments for today.

NG

When you fill out the claim form for the bankruptcy, should you include all monies paid since day one? I am assuming yes. I hope this isn't a stupid question but I've never felt more stupid in my life!

Also...when I filed my 2003 tax return June 15, I filed nothing pertaining to this business and ended up writing the IRS a check for $4,000. I was going to wait until we have some answers before I amend anything. Any comments?

Once we have attorneys representing us, they can file a motion with the court to obtain a complete list of NADN and Oryan Management et al clients.

The IRS "ruling" appears very narrow, aimed only at NADN-Oryan malls (and any other similar ones offering similar tax credits). We will let the lawyers present the case that we made good faith investments in what, until recently, were considered legitimate, revenue producing online shopping malls. Most of the stores you find in brick-and-mortar shopping centers also have an online site, so to make a blanket ruling that online or "virtual" shopping malls do not qualify as legitimate businesses is simply unfounded. Billions of dollars of products and services are sold on the internet by companies who have no brick-and-mortar stores, so I fail to see how the IRS can single out our malls for disallowing any business deductions.

Either the deductions are allowed, or Oryan will have to refund all monies collected from us for purchasing them, but that is for the lawyers to argue on our behalf.
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For those of you who wish to contribute to the "CLASS ACT LEGAL FUND", visit my website, click on the "Make a Donation" button, and follow the instructions. You can reach my site by clicking on my username, "Opaobie", below. You will receive a receipt for your donation. I don't know whether it is tax-deductible, but we will pose that question to the lawyers if and when we have them onboard. If we do not spend it all, whatever is left will be returned to the contributors pro rated based on the amount contributed.

Here is one finding that can be rebutted easily:

Q. Why would the promissory note not be treated as a valid means of payment?

A. The facts concerning the promissory note aspect of such promotions demonstrate that actual payment of the note is never intended. Purchasers are told

(1) another company will pay the note in exchange for advertising on the purchaser's website; (2) the note can be paid at a rate of $2.00 per click on the purchaser's website, encouraging the purchaser to repeatedly click on his own account (using his PIN number) to eventually full pay the note; (3) the note holder will later forgive the note; and (4) the note can be paid by making referrals to the promotion's marketer. As a result, there is no possibility that a purchaser will ever be required to pay the note and such note is considered to be invalid.

Rebuttal:
(1) The "facts" demonstrate no such thing. This finding is not valid because there is NO GUARANTEE that advertisers will pay a penney, and we learned that the only two "advertisers" used were frauds. The contract even states that if no advertisers are found, the mall owner is still responsible for paying off the note balance in the out years. Virtually ALL online websites are underwritten to some extent by advertisers; otherwise, they would have to charge a fee from visitors just to be able to pay their costs. Check the news websites if you don't believe me. Check ANY website. They are FILLED with banners and other ads. Many of them even use spyware to track visitors so they can send more ads to them. Ever looked at the cookies on your own computer after a day of "surfing"?

(2) This finding is not valid because only legitimate "hits" on the BANNER ADVERTISERS count toward credit, cookies and server-side tracking software software are used to track visitors to deny crediting the same visitor multiple hits as alleged, and the contract prohibits SPAMMing the site to collect "hits", buying bulk "visitors", and the very practices this finding alleges. The technology is not new or complicated; most sales processing companies, like LinkShare and HopLink and dozens of others use it to keep theives from stealing commissions on sales from the legitimate site owners. The $2.00 rate is not guaranteed, and an update from Oryan even said the rate will be much less for "new advertisers" -- if and when any are found. Even the "Keyword Gold" hit generator only "optimizes" search engines, and even if the search engine sends visitors to the main URL of the mall, unless a visitor clicks on a banner ad and visits that store, NO credits are generated.

(3) Oryan has stated in updates and in email correspondence to me (and probably to many of you) that they will expect full payment of the remaining promissory note balances at the time specified in the contract. They have even stated that due to DOJ injunctions, interest on the notes is not accruing and that "commissions" will now be paid to the mall owners. They also want to charge a "monthly fee" to host the mall sites. Where did the IRS get the idea that the note holder would simply "forgive the note"? If anything, Oryan is attempting to charge mall owners more money.

(4) The nearest to this finding is that both NADN and Oryan said they would assist mall owners in finding a buyer if the mall owner wishes to sell his mall, and they have a "Mall Partner" program to attract investors to help share the profits and the expenses. Since when are "referrals" and "finders fees" not considered legitimate? I know of a major corporation offering as much as $4,000 to its own employees for referring applicants in "critical job descriptions" if the company hires them.

...the more I read the IRS Q&A, the less respect I have for their intentions of "protecting the taxpayers". They are offering NO assistance to SCAM victims, they will most likely shift as much of the cost to mall owners as they can since NADN is bankrupt, and to add insult to injury and to frighten us, they are threatening to treat us like criminals.

It may be time to contact our Representatives and Senators and request an investigation and some help.

Ok, I think I have it figured out and am sending my claim to the Vickie Mullings address. For some reason, my claim form does not have an address on it. I printed it directly off the court's page, and it has the case number filled in already in PDF. Don't know why mine doesn't have the address. Also, has an amount been set for the class action fund?

Are you getting email alerts from Oryan at your mall for all or shopn2000 email account or somewhere else? I haven't received anything from them via email since last November.

Some help for you. There are two issues and two forms to consider. If you wish to file a Consumer Fraud complaint against NADN, fill out the Consumer Complaint form and send it to the Nevada Attorney General at the address below. If you wish to file a Proof of Claim form with the bankruptcy court as a creditor against NADN, use the Proof of Claim (POC) form and send it to the US Bankruptcy Court at the address below.
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Download both the Consumer Complaint form and the Bankruptcy Proof of Claim form in a zip file from this URL:
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There are several files in the zip file. A few are info files from the bankruptcy court. There are two versions of the Proof of Claim form. The "POC" form is the original that allowed you to select which chapter of the bankruptcy law applied. The Customer Claim form is the one with Chapt 7 and the NADN case number already listed, so that is the one you will want to submit.
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http://www.opaobie.com/download/legalforms.zip
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To file a Consumer Fraud Complaint against NADN, use the Consumer Complaint form in the zip file.
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Address to send Consumer Fraud complaint form:
State of Nevada
Office of the Attorney General
Bureau of Consumer Protection
555 E. Washington Avenue, Suite 3900
Las Vegas, Nevada 89101
(702) 486-3777
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Nevada AG website: http://ag.state.nv.us/
Their site is "under construction", so forms are not available from the links, and that is why I placed the Consumer Fraud complaint form in the zip file.
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If you have a claim against National Audit Defense Network (NADN), you can get a Proof of Claim (POC) claim form for the bankruptcy hearing from the court web site - under court info, forms, the form is General Form B10. You need to fill this out and submit it to the court. (I included it in the zip file mentioned above to save you time.)
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General Form - B10 - Nevada Proof of Claim
http://www.nvb.uscourts.gov/nvb/CourtInfo.nsf/7f77af8ebdbeff2288256448005e75b0/6c829378368c7aab88256d74006f9195?OpenDocument
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This is the link to the actual form (.pdf) to download and is included in the zip file referenced above:
http://www.nvb.uscourts.gov/nvb/CourtInfo.nsf/7f77af8ebdbeff2288256448005e75b0/6c829378368c7aab88256d74006f9195/$FILE/POCForm.pdf
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Send the Proof of Claim form for the NADN bankruptcy to the following address:
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U.S. Bankruptcy Court
333 Las Vegas Blvd., South
Las Vegas, NV 89101
702-388-6155
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You will need this info for the form to identify the case:
United States Bankruptcy Court
District of Nevada
NATIONAL AUDIT DEFENSE NETWORK
Case number: 03-17306
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The Court does not accept claims except by old fashion mail. You have 90 days from the first setting of the 341 meeting, which is July 8th, to get your claims into the court. You have more than enough time to submit your claims.
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More info about the case is posted on the Bankruptcy court website:
http://www.nvb.uscourts.gov/
...scroll down to NATIONAL AUDIT DEFENSE NETWORK and click on the "click here" for the latest.
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The Trustee for NADN is:
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William A. Leonard
5030 Pasadina Road
Suite B216
Las Vegas, NV 89118
phone (702) 262-9322
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MEETING OF CREDITORS
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Date: July 8, 2004
Time: 3:00 PM
Location: 333 Las Vegas Blvd South, Jury selection room
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A meeting of creditors is scheduled for the date, time and location listed in this Notice. The debtor's representative must be present at the meeting to be questioned under oath by the trustee and by creditors. Creditors are welcome to attend, but are not required to do so. The meeting may be continued and concluded at a later date without further notice.
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NADN provided tax return preparation and audit defense services.
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A number of tax returns have been completed and many are in the process of completion. The estate will not be releasing those tax returns in the immediate future. Negotiations are ongoing to provide a follow-up entity to complete those tax returns. Please check back regularly for a status on the return of those tax returns.
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No support is currently available for audit defense. You are advised to contact a tax attorney to assist you in an ongoing audit.
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Please do not contact the Bankruptcy Court, the Office of the United States Trustee, the Clerk's office or the Trustee regarding tax returns or audits.
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If you are not receiving periodic updates from Oryan "support", you may not be on their list or they may not have your correct email address. If you can't reach them via your backoffice, you might try emailing them at their support email address (look in old emails from the email address) or go to their website and look for contact info. http://www.oryanmanagement.com/

Afterthought --
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You might want to include a copy of the Consumer Fraud Complaint form with the bankruptcy Proof of Claim form as support documentation when you mail it to the bankruptcy court.
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No amount has been set for the legal fund. That won't be determined until we have a commitment from lawyers. Any amount is acceptable as a donation. We have not pressed for donations yet because they are not yet needed. We are just slowly collecting money in case we need it to pay any legal fees or filing fees. We are hoping to negotiate for a low up front payment with a small percent of the recovery going to the lawyers, but that is not yet decided either.

For those of you who have been advised by the IRS to consult a "tax expert", you might politely remind them, "THAT is how we got here".
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NADN's credentials at the time we first began this journey into oblivion were among the best, and they were among the "Who's Who" in Nevada and throughout the industry. Their ads appeared on some of the top radio and TV programs and in major publications. They were listed in phone books and in business journals. Look at the buildings they occupied and how many people they employed. Look at the national recognition and honors some of their leaders received. They were former IRS "experts". What better credentials could they have presented? Just as there was no way in advance to determine NADN was dishonest and untrustworthy, the next "tax experts" we consult may be just as unscrupulous in spite of impeccable credentials, and they could make a bad situation worse. Being a member of the "Chamber of Commerce" or listed with the "Better Business Bureau" apparently is no guarantee of honesty. We took all reasonable precautions to make sure we complied with all the tax laws. Most, if not all of us, were looking for a promising business venture with reasonable expectation of good return for our investment -- NOT A TAX SCAM! I'm still looking.
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Online "stores" are making $$Billions$$ -- ever hear of "Amazon.com"? Their warehouses are larger than most businesses' entire complexes, yet they are exclusively an "online shopping center". Almost every store you see in a shopping mall has an online extension. Online shopping is here to stay, and for the IRS to say these are not "legitimate businesses" flies in the face of fact. They may have a good case against the ShopN2000 and MallForAll sites based on what has recently come to light, but the concept meets all the guidelines of a legitimate business, and money invested in that form of business is just as legitimate as buying a franchise that goes broke. The "modifications" may not meet the ADA guidelines for tax credits, so if that is the case, we have a legitimate claim against both NADN and Oryan to pay the penalties and interest that may be due the IRS for having taken those credits. We also have a valid claim that the tax refunds resulting from taking those credits should come from NADN and Oryan. They "guaranteed" they met the ADA guidelines, NADN guaranteed our tax returns were in full compliance with all tax laws, so they should be forced to make good on those guarantees BEFORE they pay any other creditors. Fat chance.
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To punish us now for having done exactly what the IRS is now telling us to do, "consult tax experts" just because the "tax experts", formerly "experts" at the IRS, misled us, would be a travesty. NADN and Oryan took our money, "sold us the business", and guaranteed our tax returns would pass any audit. Any taxes owed on our parts should be paid from their assets, or those assets returned to us so we can pay them. Either way, the money should come from them, along with a full refund of our "downpayments" and voiding of the "promissory notes".
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We are all just waiting to file amended tax returns, but how do we amend them until we know the results of the bankruptcy hearing and the final decisions on the DOJ injunctions and the IRS rulings? At the very least, the interest and penalties should be suspended until we have the information to file correct amended tax returns, or we will be refiling them again and again and again as each decision comes down.
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...maybe the IRS should tell us who THEY consult to do their taxes.
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...how appropriate, "Foolish Heart" by Journey is playing on the radio.
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...maybe "Working on the Chain Gang" will come on in dedication to NADN and Oryan.

Opaobie,

I have a mall purchased in late 2003. I have not taken any deductions for the mall, nor have I received any comissions from the purchases I made myself. In my opinion the whole thing is a sham. You may be able to argue some legitimate aspects of the MAll, but the way the note is inflated and just the right amount for a good tax break can't be overlooked. I agree we entered in to this thing in good faith wanting to bring in extra income and the tax breaks were just "icing on the cake". I am having trouble understanding your position and the direction of a lawsuit. It seems as though from your post on 7-02 that you are trying to legitmize the promissary note. Why would you want to do this?I see two groups of people in this. Those of us who got in late and haven't taken any deductions, and those who have for one or more years. Those taking no deductions (myself) don't want the promissary notes to be legitimate debts. I agree with the IRS and DOJ position. Not only would we be out the money initially invested, but then to have to pay back a large note with interest, salt in the wound! Those who have taken deductions seem to be caught between wanting to legitimize the note (so they can legitimize there deductions with the IRS) and not wanting to pay the sham note back. I admit I want this to turn out in some way good for my situation. Help me understand what you are thinking. Your last post does clear up some of my concerns when you stated "a full refund of the downpayment and promissary notes". I do want to participate in a class action suit if it would go in a way taht would benefit all.

It is up to the courts and possibly the IRS to determine whether the promissory notes are legitimate and how (or whether) to report them on amended tax returns. None of the mall owners want the promissory notes hanging over us; we all want them voided. Sorry if I didn't make that clear. So far, the DOJ claims they are bogus, and we mall owners believe they are bogus and would not hold up if challenged in court, and that is part of our position in the lawsuit. Oryan would do well to voluntarily void them as an act of good faith. We didn't know it at the time we purchased the malls, but we now know the promissory note amounts were calculated to allow maximum tax credit for the modifications and were most likely part of the overall fraud conceived by NADN and Oryan. The IRS has already indicated they will not allow the ADA credits and doesn't seem to want to allow any expenses at all associated with the malls, but if that is their position, I belive I have posted a good argument with examples above in rebuttal. Either we are allowed to deduct the downpayments as legitimate business expenses, or they must be refunded. I further believe we should be able to get a full refund of the downpayments based on breach of contract because Oryan never fulfilled their obligations under the contract. No modifications were made that conform with the ADA guidelines, the malls did not track visits and sales properly to credit clickthroughs or commissions properly, so that alone is enough to prove breach of contract if not outright fraud. The potential to generate revenue is there in spite of what the IRS says; it is just the fraudulent implementation that was hidden from mall owners that makes them worthless to the owners. That is why we should be allowed to deduct the advertising and other expenses and should be able to sue Oryan for fraud and breach of contract. I hope I am making clear the difference between the IRS saying the online mall "concept" never was a legitimate business and my saying that the concept is proven by thousands of online businesses every day and that only the "implementation" by Oryan is flawed. It really muddies the water trying to determine whether the refunds should come from NADN, who collected the downpayments, or Oryan, who delivered the mall products and services. Each will try to claim the other should make the refund if the court says the downpayments must be refunded.
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So, to answer your question, the downpayments should be refunded if we cannot deduct them as expenses, and the promissory note balances should be dismissed. I believe every mall owner wants a full refund of all downpayments, no matter whether it is one, two, or more malls. I certainly do. The ADA tax credits will be disallowed when the appeals process by Oryan and NADN fails, and it will fail. If the downpayments are not refunded, we should be allowed to deduct them as legitimate business expenses. Any advertising money spent should be allowed just the same as advertising money for a venture that goes broke is allowed for brick and mortar investments. No matter how it is decided, this entire scenario puts many of us in a severe financial hardship. We can certainly defend ourselves against the claim that we were only looking for a "tax dodge" as insinuated by the IRS. They now tell us to "consult tax experts", but we are in this situation because we consulted tax experts in the beginning, paid for their advice, paid them for mall sites that were guranteed to "conform with the ADA guidelines for tax credits"; so we should be given some recourse for recovery to the state that existed before we acted on their advice. How the IRS will finally rule is hard to say, but most likely, they will try to disallow as much as possible. That is why we must file a proof of claim for every penney we paid NADN and file a lawsuit against Oryan for the downpayments and to dismiss the promissory note balances and possibly damages because of the financial harm caused to mall owners by Oryan's fraudulent actions. Whatever is decided in the bankruptcy hearing and concerning refunding downpayments and voiding the promissory notes will form the basis for amending tax returns. The results of each year affect the subsequent year, so for about 3 or 4 years for some people, we don't yet have a clear instruction for amending them. For that reason alone, any interest and penalties should be suspended.

Opaobie,

Thank you for making things more clear. I appreciate the effort you are making in all of this.

Tell you what I want. I want someone else to pay the IRS back the tax money the NADN got for me for fradulently doing my taxes after I get audited. Also make any obligations to those a--holes and Oryan go away. Im still ahead with the money I got back on taxes but not much at all. It would truly be a sad day to have get a home equity loan or sell my harley to pay back the IRS and still have these promisorry notes and even the cost of the hit generator I foolishly purchased in feb of 2003 all hanging over me. I might just go file for some bankruptsy protection myself and sell (temporarily) my toys to friends to hide for fractional pennies on the dollar.

I thought one guideline used by the IRS to determine whether an activity should be considered a business is that the activity must show income for three consecutive years within the first five years of the activity. Has anyone done this without including the clicks for the NADN sponsors? Has anyone gotten a 1099 directly from Oryan and not from G&L Eagle Enterprises? If it can be demostrated that some mall owners met the IRS guidelines for a small business then it would help to support our "legimate" business deductions minus the ADA credits and deduction. This would also support the position of deducting a "theft" loss or "business" loss due to the NADN bankruptcy. It doesn't seem practical that the IRS will excuse all of the fradulent deductions simply because we had good intentions of establishing a business. We should focus on minimizing the damage by showing that the malls are legimate businesses if that is possible. A main question asked by the DOJ was could NADN stay in business without the fradulent activity? Apparently, not. It seems Oryan is trying to do this. I know most of us wish we never got involved with this mess but it may be better to show that it is a legimate business with some bad deductions then not a business at all. If Oryan can get it's act together it may help us in this regard. The Linkshare company seems legit. It provides its services to other companies. There are over 200 merchants participating in the Mall program. These seem like positive points towards legitimizing it as a business.

When I did a search on yahoo for "virtual mall" I got 196,000 hits. Who will break the news to these folks that their virtual malls are not a business? Is the IRS kidding?

Q. I was told that purchase of the website entitled me to deduct certain amounts as business expenses on my tax return. Are these business expense deductions available, even if the credit is not?

A. Because virtual mall websites are not a valid business (i.e., have no economic substance), associated costs are not deductible under the Internal Revenue Code. In any event, the amounts paid could not be defended as "ordinary, necessary, or reasonable" business expenditures, as is required by statute for the deduction of business expenses.

Q. Can I deduct my website expenses as costs of producing income under Internal Revenue Code Section 212?

A. Because the facts detailed above demonstrate that such websites are not purchased with the realistic intent to produce income (i.e., purchased solely for tax purposes), the associate costs are not deductible under the Internal Revenue Code. In any event, the amounts paid could not be defended as "ordinary, necessary, or reasonable" expenditures, as is required by statute for the deduction of an individual’s income production expenses.

In order to be considered a business and not a hobby, it cannot continually show a loss for more than (I think it is 5 years). According to Oryan's records, every mall was producing income, but the income was being applied to the "promissory notes". In any case, officially, the malls do produce income -- as demonstrated by the issuing of 1099s and profit and loss entries on Oryan's balance sheet. The problem is, Oryan was keeping all the income and trying to write off expenses through a mixture of legitimate 1099s for sales and bogus 1099s for clickthroughs by pretending the income went to pay off the bogus promissory notes. Demonstrating that income was and can be produced from the malls is not the problem. Lawyers or the court or the IRS can force the various stores within the mall as well as LinkShare to produce records of sales created through either the Oryan affiliate ID or traced to the mall zipcodes, whichever way they track them.

The IRS cannot deny mall owners the same deductions they allow to other online businesses such as Amazon.com, eBay, Sears, et al, just because they say the malls "appear" to be ONLY fraudulent sites allegedly improperly modified for disabled access to get tax credits under the ADA. They are poorly designed and operated, but they are online malls, and sales can be and have been transacted through them even if credit for sales does not properly go to the mall owners. Many of us have a record of at least one sale logged in our backoffices. The IRS does not know what was in the mind of the mall owners when they chose to purchase the malls, in my case it was to generate revenue to supplement my income, so to say the only reason for purchasing a mall was to get the tax credit is patently false and should be rebutted.

Opaobie,
Have you gotten a 1099 from any entity other than G&L Eagle Enterprises?
Are you saying that you never received a commission check from your Mall business?

I'll have to check to see who issued it, probably G&L Eagle Enterprises, but I received a 1099 a few years ago for about $600 and called NADN about it. I believe they said it was for sponsor credits or a referral, they weren't certain, and I didn't follow up because at the time, I still trusted them. I did not receive a check, it was applied toward the "note balance". I remember being a bit miffed at having to show as income money I never received credited against a debt I owed to them, but that is history now. I will certainly delete it from my amended return for that year when I refile.

I show one sale ever in my backoffice, something from Perfumania for about $35. I have never received a check from NADN or Oryan for any commissions.

Regarding the business expenses---- Anyone who bought the mall paid about $2495 cash and a $7980 promissory note for each "disabled modification". With that we were supposed to get a business write off of about $5475 and a $5000 tax credit. And the chance to earn income from sales on website, which had a point of difference of allowing disabled access.
From feedback from the IRS and the Dept. of Justice (which indicated that disabled modifications weren't adequately made) it is now clear that the $5000 credit nor the $5475 -write off is not allowed. I believe the promissory note expense/future tax liability was factored into the $5475 [DOES ANYONE KNOW HOW THEY CAME UP WITH THE $5475; WAS THE NOTE WAS PART OF THE CALCULATION?; I BET IT WAS] With the write off and credit not allowed, the $7980 note should be voided by Orion IMMEDIATELY. We will all have to eventually ammend our returns to remove both this deduction and credit or if bought just in 2003 not include the credit or write off. That will be a financial hit for all of us. If you had taken credit in past look at that as a loan we got from the government that now has to be paid back. Orion would best serve their chance to remain in business by building trust among mall owners, empathizing with with the deceit and financial hardship we have and will face and cancel out all notes AS SOON AS POSSIBLE. Not for sympathy but because the mall doesn't have the disabled features and tax benefits it was sold to us as.
But the mall does have stores and can generate revenue. Orion has to work on making the mall more shoppable and have a meaningful consumer benefit/point of difference.
Regarding the $2495 cash investment and other related expenses (if you marketed the mall and had business expenses) I believe the IRS should allow that as a legitimate business expense if your intent was to treat as a business. We were told it was a business by an alleged reputable source (Opabobie you make good points about this earlier). I thought IRS gives you 3 years to turn a profit. If your intention was only to treat as a tax loophole, I don't believe you could then write off the $2495 nor other expenses.
ALSO, WHEN IS THE DEADLINE TO FILE FORM WITH BANKRUPTCY COURT FOR NADN- IS IT JULY 8 OR 90 DAYS FROM THEN? For reference, I bet there will be no money there for us; but worth a shot.

Let's say the $2,495 is viewed as a setup expense. Then you bought a hit generator for $2,000 that didn't generator any sales but now Oryan has straightened out the problem with Malls being properly credited and you purchased another online marketing tool that brought hits to your Mall that were converted into legitimate sales generating legitimate income to you. Could the $2,495, $2,000, other marketing expenses and reasonable home-based business expenses be considered legitimate deductions? If you can show legitmate income from this point forward I think any actual expenses paid (i.e. $2,495, hit generator, etc.) in the past would be allowed minus the ADA tax credit and deduction. I understood the initial ADA compliancy modification but I did not understand the "modifications" made in subsequent years. It would be like making the entrance into your business ADA compliant but year 1 you did the ramp, year 2 you did the automatic door opener, year 3 you did the railing, etc. Wouldn't it have made sense to make all of the mods in year 1 with the original setup? My main point is that paying back the tax credit and related deductions is bad enough but if all mall related expenses were denied it would be allot worse.

I got a package today in the mail from the Bankruptcy court. Long story short, not much different from what you already know except they changed rooms for the hearing on July 8, deadline to file a POC is still October 6, 2004, and to save having to notify 4500 people anytime something happens, they want you to look for updates on the bankruptcy court website (posted several times above).

Anyone who purchased a mall, no matter what the reason, should be able to claim the same deductions for running an online business as those who spent thousands advertising it. Thousands of people invest in businesses and never even visit them; they leave the running of the business up to the experts whom they hired or contracted with to do the day to day operations and advertising. The IRS should not deny the deductions to those who did not spend a penney advertising. As I said above, they have no way to know why a person invested in the malls; all that matters is that they DID invest.

From what I read from the DOJ report, there was only one mall, clients were never sold their own mall, clients never had a mall, just a PIN pointing to the one mall. What is the story behind that?

As long as each "site" has its own unique URL and both visit credits and sales commissions can be tracked and paid to the "site" owner, it is no different from any other "affiliate" business. Many MLM companies do the same thing. They create a core site, build a "gateway" page that does the unique affiliate tracking, and all sales come from the core site. The technology is not new, it is very stable, it has high security for protecting credit card numbers during sales, but the problem with the way Oryan implemented it was, theirs was flawed -- possibly intentionally so clickthrough credits would not be credited and sales commissions would not be paid to the proper "mall" owners. In my case, NADN supplied a bogus URL to Keyword Gold so when visitors clicked on that URL, an error message appeared saying that was an invalid "mall" and then redirected them to the NADN/Oryan default mall, thus stealing my visitors and any sales commissions I was due.

If Oryan had implemented ADA modifications properly, even the gateway method would have qualified. They were either too incompetent or too crooked to do it right.

If you have not yet joined our Class Act Legal Cooperative, I urge you to join immediately. There is no obligation, and you will be kept informed of the latest developments in our class action lawsuit preparation. We may be asking for contributions to the legal fund in the very near future as legal papers are filed in court, so if you would like to help us help you get your money back, click on my username, go to my site, click on the "Contact Us" button, and join our group. If you wish to donate to the legal fund, click on the "Make a Donation" button.

Legal fees associated with a business may be tax deductible, but I cannot promise that these donations qualify. We will ask the lawyers in our next conversation. In any event, consider donating any amount you wish. A few dollars from thousands of people can build a substantial legal fund. Money not spent will be returned. You will receive a receipt for your contribution.

Ben Dover,

The "zipcodes" were mostly a verbal marketing tool used and presented by the reseller as those "limited but available" and "cleared by the government for the ADA tax credit" (boy what hind sight does for that!). Many, if not all, received a demographic write up about their zipcode from Oryan. One of Oryan's FAQ's had it this way:

"Zip Codes are subject to availability. Only one client can have the MallForAll.com store for a specific zip code. Zipcodes are used as a PIN for Marketing purposes, directing Shoppers to your Web Mall, and for tracking commissions due to you. Zipcodes are automatically assigned to new mall owners if your 1st and 2nd choice is not available."

This passage was cleverly worded, probably to address & cover for things that were arising with Frequently Asked Questions from owners. Where else? I know that when I started having questions, I couldn't find a list of government authorized zipcodes for the ADA credit online and didn't bite on the second "modification".

Notice how they use "store" and not "website" as in the contract. They say that "Zipcodes are used as a PIN", nothing about PIN's in the contract. (Aside: To be correct, strictly from a PIN standpoint, it sould read "PIN's are used as zipcodes for marketing purposes". The intentions are obvious, to do so would have taken away that sales hook of claiming zipcodes were "cleared" by the government or otherwise limited.)

Out of curriosity were you, or anyone reading this, ever sent a form requesting your 1st and 2nd zipcode choice? The ones I would have chosen are very available.

My credit card company, after nemerous attempts, finally put my $6000 charge against NADN in dispute at the beginning of MAY after 120 days of the inital charge. Yesterday I got a letter stating it has been removed from dispute status and is now a credit! I am still in disbelief. The only downside is that the merchant bank of NADN will have the opportunity to review the case and will be in contact with NADN, and if they can prove its a legitimate charge it could be reversed. Is this possible since NADN is out of business? If I hear nothing within 90 days of July1, the credit will be permanent. I'm praying that this credit will hold up. Any thoughts on this are appreciated.

Opaobie,
If the current site is using the "gateway" method and Oryan met all of the IRS/ADA guidelines, I could see an issue with each mall owner getting the ADA tax credit and deduction. It's like a physical shopping mall making its main entrance to the mall ADA compliant and all of the individual inside stores each getting the full ADA tax benefits. Does Oryan provide customized web pages for each mall owner? If the same webpages are used by each mall owner but traffic is separated by PIN number then it seems that the ADA tax benefit would only count once for the "core" site. If there are a set of unique webpages for each mall owner then maybe that could be considered as separate websites qualifying for separate ADA tax benefits.

AUDIT??? I joined NADN in 2001 for "audit defense" insurance. I never had them do my taxes and I didn't participate in the Shopn2000 or Mall for All programs. It now appears the IRS has a list of all past NADN members. I haven't renewed my membership since 2001, but I just received the bankruptcy notice yesterday, so I guess I'm still in NADN's database. Does anyone know if the IRS is going to audit all 640,000 NADN members in their database, or is the focus on the ADA scam? Anyone in a similar situation as me???

I was poking around looking for those FAQ's that I'll Drive posted and found this statement for the Question "Is it Legal?"...

"Yes. We have presented this tax plan to tax attorneys who have rendered their opinion that this tax plan is legal. Recent court rulings as well as newsletters from the IRS further support this tax plan’s basis."

It is time for Oryan to come up with the Tax Attorneys names and provide those written renderings. They've got some explaining to do. They haven't sited those Court rulings or IRS newsletters to during this shake down either. Those are public documents, and revealing them should have nothing to do with Oryans legal position on this matter.

Hey Getting Even Guy,
Before this whole mess started I sent emails to support and Trey at Oryan asking for those "court rulings". I got no response from the emails. I called and spoke to Trey about this. He said that wasn't his area of expertise. He said I would have to call the operator and have her direct me to the appropriate person. When I did that I was told to leave my name and number and someone would get back to me. No one ever did.
P.S. I got the notice from Bankruptcy Court. Besides the stuff we already know it said that the "Trustee lacks funds in the Chapter 7 estate to pay priority wage claims incurred but unpaid during the Chapter 11 case prior to conversion to Chapter 7". NADN was in Chapter 11 for almost a year. Allot of debt pertaining to employee wages probably accumulated during this time. It doesn't look hopeful that any of us will see any type of refund from the Bankruptcy. Everyone should file a claim anyway so that you have documentation to support a business loss or theft loss claim on your taxes.
P.P.S. Does anyone know if the salespeople can be personally liable for this mess. They had to know what was going down. Could the Class Action attorney subpoena the employee records for people like Chris Cotner, Mark Bausch and Dan Goodman among others and name them separately in the lawsuit. This would make them think twice before engaging in similar activity.

To "I'll Drive"- I was never given a zip code choice. Last Fall, however, Orion contacted me to tell me that malls purchased in 2003 were going to be given "pin" numbers and not zipcodes.
To Vinnie- You may be very lucky. Wish I had paid with a credit card; I was never told that was an option.
To " "(posted 8:22)- When sold the mall I was told it could be customized but then never received documentation on how to do. e.g., I could have stores that may appeal to demographic composition of zipcode highlighted somehow.

How is that Oryan is said to be worth $millions$ if no mall owners are making sales and collecting commissions. Is their worth just from the fraudulent sales?

Linda, I'm certain Oryan's/NADN's worth was based on fraudulent sales. They took advantage of our trust. The rep I dealt with basically told me "hey, you're the one who hired us, right? We're in business to save you money. We're your tax advisors and this is what we advise..." At one time I truly felt they were working FOR me and providing legitimate tax advice. Didn't we all? Now, I'm not certain what to do. I guess I'm still bitter and somewhat in shock. I've been under-employed since February and the last thing I need is an audit. Don't see how I can afford to pay a tax attorney to try to fix this mess, but don't see how I CAN'T afford to pay one either.

Quoth:
Our primary defendant in the class action lawsuit is Oryan -- and all of their partners still standing --, and they have not filed for bankruptcy protection. They do have million$$$ in assets

As a former employee I can say this much, HAH...tho I'm a pessimist, if you sue them and win, good luck recovering anything. While I belive that you are in the right, I think that ultimately there isn't much hope at Oryan for a full recovery.

Pessimists, stand back and watch. Just a reminder: trying to divest assets or hide them to avoid creditors and then filing for bankruptcy is a crime, and it is also futile. The court will simply reverse those divestitures and prosecute the offenders.
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After tomorrow's conference with the lawyers, I hope to have good news. In any case, I will post the results.
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Remember there are three kinds of people:

1. Those who watch what happens.
2. Those who wonder what happened.
3. Those who make things happen.
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....pick a number.

4. Those who have things happen to them.

If there are any assests left, it's doubtful any us will receive anything. The IRS is first in line (to the tune of 1.3 million if memory serves correctly). Remember when K-mart went belly-up? Enron? WorldCom? The investors got nada. Hope I'm wrong, but the little guy rarely recovers money.

Thanks Opaobie for this web site and all you've done so far. I just sent in a contribution and hope that everbody will do the same. We need to stick together. There is strength in numbers.

It's not that I don't think you won't recover anything from filing suit in Oryan. It's just that there isn't anything to recover. As the same former employee, I'd say they're worth 6 digits at best...possibly a low 7 back in their prime. They have little solid assets, making liquidation not worth much more than what's in their accounts. That gives everyone pennies to recover at best...though good luck :-).

A photo of some of the former executives at NADN doing the perp walk would be nice.

The knowledge that we put criminals out of business -- maybe in jail -- never to do this to anyone else and being allowed to deduct every penney we lost to them makes this effort worthwhile by itself. If we don't sue them, they walk with whatever they have and are free to prey on others.
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...call it our civic duty.
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I am happy to do my part, but the "Thanks" should go to Chris Tulino for opening up this forum to allow us to join forces. Without it, we would all be uninformed and tilting at windmills by ourselves.
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The more I thought about the IRS folks saying "online malls" were not legitimate businesses, the more determined I became to prove them wrong...and I have. I have been working with one of the most successful online marketing teams in the world to set up a simple example site that works. Actually, we have set up two different versions. They even publish a newsletter read by some of the top leaders in the industry.

I received an email today from them with a simple method to allow the IRS or anyone else to see what a real online mall looks like. It even uses clickthroughs -- PROPERLY -- to help pay for itself AND to pay the site owner. It does not offer ADA tax credits, but income produced from it is taxed just like any other income, so the IRS should love that. It is free to operate, but I can spend money advertising it if I want, and that expense is tax deductible.

I have it placed prominently on my website. All sales are tracked -- PROPERLY -- by ClickBank, one of the industry's most trusted and secure companies. If you want to participate and demonstrate to the IRS that anyone CAN operate an online mall that is legitimate, just click on the "ClickBank Mall" banner on my website
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..(click on my username below to reach my website)
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and look it over. There is a link to create your own site if you want to. You can even operate this business without owning a website to place the ads and links the way I have. Just send them in emails.

I am NOT trying to sign anyone up for anything -- the whole thing is FREE anyway. I am just making a public demonstration that online malls are legitimate and available to anyone for producing revenue.

Sure these virtual malls might turn into a real business. That was supposed to be the starting point, not the goal.

I think that everyone took the "ForAll" part of MallForAll as the major marketing point due to the unique niche that it was supposed to serve with that which should have been ADA compliant. Without that part of the package you have LEFTOVERS, and not the main meal.

This was supposed to be targeted for use by the impaired, they were supposed to be our main customers. Even the main mall that Oryan established was confusing to the unfamiliar at best, but the impaired section was obviously a nightmare for even the unimpaired to try to shop at.
So look at the marketability of the main mall without the ADA section. The site is incomplete and confusing. Search features are limited and convoluted. Searches often lead to out dated or bad information. Redirects continue to take you away. There is no security. Who would waste their time shopping at the site.

When most people pull out thier credit card for online shopping they want security. This is and has been a major obstacle with the Mall. Security should have been there from day 1. With the problems that Oryan created by not making this ADA compliant and their other monkeyshines that has invited complaint about the Mall, anyone who does a search for security purposes finds the DOJ action and similar information. Need I say more, you can't effectively operate this under these circumstances. It's like surfacing a submarine without air to blow the ballasts.

Opaobie,
I do thank you, Chris Tulino and the others for helping to resolve this matter in the best way possible for all of us who have been affected. However, the fact that you were able to "duplicate" a large part of what we "purchased" from Oryan for "free" raises the issue of how of the money we ""paid" to NADN/Oryan would be considered reasonable. One of the things that I have tried to do, without much success so far, is to get estimates from other web developers for the type of service Oryan is suppose to provide to us. For instance, most of us paid about $2,495 as a "down payment" on the note. Assuming the notes are voided and this money can be viewed as a setup cost, how of this money would be allowed by the IRS as a deduction since you just showed you could do it for "free"?

Good questions with a simple answer: It is FREE to the mall owner ONLY if set up correctly such as with clickthroughs that actually pay, commissions that are actually paid, AND, if there is no monthly bill or upkeep fee to pay such as for hosting, etc. ADA compliant modifications would cost extra, and could be very expensive if they were set up for each merchant in the mall. Adding additional modifications or capabilities each year would cost money, and that is what we thought Oryan was doing, so we didn't challenge them as strongly as we should have.
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A much more efficient but not cheap method would be to build an entry page that worked like a translator. Then, each time you visited a store in the mall, that store's site would be loaded into the translator, and all of the ADA features would work for that store. It should have the capability to handle multiple stores at a time, so that would merely add to the bandwidth and require larger servers. It could be done for each separate mall or for the core site with gateway pages between the translator and the core site.
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Oryan simply didn't do any of this correctly. Now as they scramble to meet the legal requirements to fight the label put on them by the DOJ, they are asking mall owners to pay for hosting. It proves only they were unprepared for the contingency of not having any ad sponsors and are not trying to cover their monthly costs.
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Oryan's claim was that all of that was covered by the downpayment and the banner ad sponsors plus commissions from sales. The CONCEPT is sound, but it still has to generate revenue to pay for itself or charge the mall owner just like renting a building and setting up a storefront and paying the electric bill, the water bill, etc.

...I meant to say Oryan is NOW trying to cover their monthly costs, but they could also just be trying to get as much additional money as they can from mall owners by charging a monthly fee before they are shut down or file for bankruptcy protection.
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As far as how much of the downpayment we should be able to claim -- assuming the notes are voided --, every penney. If you hire a contractor to build you a store and it goes broke, how much of the cost should you be allowed to deduct even if you later find out he overcharged you? Did you pay him that much? You may have overpaid him, but you still paid him the full amount.
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There are limits set by the IRS for amounts and percentages for deductions, but look at the outrageous claims for donating your underwear to the Salvation Army some people got away with, and look at some of the other allowables for meals, "art" donated to the local art museum, etc., so the question of how to claim it and how much is allowed by the IRS since fraud is alleged may depend on some court rulings. Hopefully, we will know more later today.

I just want to say thanks to Chris, Opaobie, Bev and all of you who have done so much to bring all these issues to a head. The Court in Nevada is meeting this afternoon. My assumption is not much will be accomplished today. There may however be some rulings regarding the tax documents NADN is still holding in storage (that would be nice) so look for a new posting soon.

Meanwhile all of us need to stick together. There is a long road ahead "with many a winding turn" and we will need patience as we move forward. We will be fighting the IRS mentality that we somehow participated willing in tyhe NADN and Oryan scam and we will be fighting NADN, Oryan and the others to try to recover some of our financial losses. I find it fascinating that Oryan thinks they were somehow exempt from inclusion in this scam. The fact that they keep telling us the websites are viable shows how callous and smug they are.

Maybe the picture isn't so bleak however. The chairman for Enron Corporation was arested and indicted today (so keep the faith everyone). I personally think all these "darlings" should spend time there. I chose the word darling because it was less offensive than the one that originally came to mind.

As for me, I've decided that this issue goes far beyond the money I may have lost. It goes to my integrity as a person. I bought into this scam with every intention of running a profitable and legitimate on-line business. I'm sure you did too. How dare anyone say or believe otherwise! For the IRS to even suggest this shows me that their mentality hasn't changed at all. They still believe the American Tax Payer is "crooked" and somehow always looking for ways to defraud the Government. Meanwhile we pay taxes on just about everything (food clothing, gasoline, luxries etc. etc. etc.) and we get to claim very little back at the end.

Perhaps we American Tax Payers should all get together and force our politicians to enact a flat rate tax based on income levels and get rid of the IRS and all of the voluminous Tax Codes that were created and which no one, not even the IRS, understands anyway. Just think, a well-enacted flat tax would also end the loopholes through which large corporations and wealthy individuals hide their money in offshore ventures and in other countries as well? You'd pay taxes based on all the revenues you earned (Period).

"Imagine"? Just imagine: no more paper, no more filing, no more potential or actual "fraud", no more IRS accountants? "Imagine" (John Lennon)?

I'm rambling but this is a forum, so I thought I'd share my thoughts with you.

Again, my thanks to all of you who are keeping this battle going wherever this takes us.

I just found a letter sent to me in Sept 2002 from Oryan congratulating me on the success of my business and my election to extend my website to be accessible to the speach and hearing impaired. Two points I want to make:
1) The letter stated that "Advantage Marketing" would be modifying my website with the new disabled features. It would be ready in 30 days. Does anyone know who "Advantage Marketing" is? Are they still in business?
2) The letter was signed by "Wes Coolidge, President of Oryan". Is he the same as Weston Coolidge the President of NADN??????

Opaobie, I've tried to access your site but no luck! I'm up for the fight too, I've only been with the NADN since last July and to read that they were in chapter 11 then and no mention was made of this ticks me off even more. I'm lucky enough not to gotten to far involved and they didn't get a chance to do my taxes.(but still out $3600) I talked with the IRS yesterday and explained what has happened and they worked with me, giving me till 1 Aug. to send my taxes in. I guess it's better than them come looking for me.

RMarie,
The letter you reference from Oryan signed "Wes Coolidge, President of Oryan" sounds like it is a significant piece of documentation that you should keep in a safe place and send a copy to the DOJ people. Hear is their contact information:
Address/info:

Evan J. Davis & Phyllis Jo Gervasio
U.S. Department of Justice
Evan.J.Davis@USDOJ.gov
Phyllis.Jo.Gervasio@USDOJ.gov
Tel: (202) 514-0079
Tel: (202) 514-6539

Our mailing address is:

U.S. Department of Justice, Tax Division
P.O. Box 7238
Washington, D.C. 20044

RMarie,
You should get a copy of that letter to Opaobie so that he could show it to the Class Action attorney. I think the attorney would find that letter very interesting.

My website was down earlier for maintenance -- seems like it is getting a lot of hits. Thank you all for visiting. It was back online when I checked just a few minutes ago.
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In addition to compiling all of the documentation you received from NADN and Oryan and any of their other partners or third parties such as "Keyword Gold" and "Tax Ready", I urge each of you to fill out the questionaire created by the DOJ folks. I include the questions in my "Overview" letter, so if you don't have them, either retrace the posts on this and the previous page to see where they are posted, or contact me through my site and ask for another copy. You can send them to the DOJ if you wish, but our lawyers will need a copy, so at the time you are contacted and asked for documentation, please be ready to send them copies of your documentation -- NOT YOUR ORIGINALS -- and the questions and answers from the DOJ questionaire. Any unique letters such as the one RMarie mentioned would be very helpful.

Opaobie, you're correct. I needed to thank Chris for this forum. THANKS CHRIS. Anyway, what responsibility does the IRS have for allowing NADN and Oryan to scam so many people for so long. It appears that they were receiving thousands of returns for several years and let it continue. Why didn't they step in and put a stop to this sooner? I'm not a tax accountant and relied on NADN to prepare my taxes according to the law.

As you begin to gather your documentation, you should make two types of packages: one dealing only with NADN, Oryan, et al for the purposes of prosecuting the lawsuit, and one to be used in amending your taxes. EVERYTHING dealing with the malls or NADN or Oryan et al (even email) except your actual tax returns and documents like W-2s that have nothing to do with NADN or Oryan et al go in the first package. 1099s and income from commission checks for "revenue" from your mall would go in this package. Your as-filed complete tax returns and all supporting documents go in the second one. Separate the tax package by tax years. Remember, make copies and do not send your originals.
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The reason for this separation is that the two issues need to be separated. Prosecuting the lawsuit may take some time, but refiling the amended tax returns or at least filing for an extension and a repayment schedule needs to be done soon. Hopefully, we will have legal directions soon on exactly how to proceed with refiling so as to reduce any penalties or interest (if not have them waived altogether due to extraordinary and extenuating circumstances).
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If you prefer to deal with the refiling of your amended taxes on your own, you need not prepare the second package for our lawyers, but you will need it for your own tax consultant. Most CPAs and tax consultants and the DOJ are saying not to include the 1099s as income, so that is between you and your tax consultant.

Reminder:

You can get a copy of the "Overview" letter by clicking on the "Class Act Legal Fund" link on the right side of my website. I will only add you to the contact list if you contact me either by email or by using the "Contact Us" button on my site. Click on "Opaobie" below to reach my site.

Has anyone received a notice from the IRS/DOJ yet? I haven't yet.

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Opaobie,
We can't be alone with the following idea. We were originally under the impression that the ADA modification included a program that ran in the background and was readable with software like that from IBM. The pointed to IBM software was originally advertised predominantly at the website. Not having such software, to see the Emperor's new clothes, is why we didn't initially question the operation or high cost of the modification. The assuption was that some sort of translator, like in your earlier post, was involved. Of course when we started asking questions and found things like the "Bobby" ADA Compiant analizer, that idea changed.

Opaobie -

How did the call go yesterday?

Gary makes an excellent point. Hopefully the IRS will understand it.
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The call went very well, and wheels are turning. In order not to tip our hand to Oryan, "Hi, Chris or whoever you really are", I won't post details, but I can report that we may soon have even more help from some high places as well as legal representation. The most difficult issue to resolve will be the tax mess, and we are working that issue very carefully. As soon as I have something significant, I will post it and contact the Class Act Legal Cooperative members. If you haven't joined us yet, please consider doing so.

Gary-I too questioned the disabled access component very hard before investing. I was told that the disabled symbols indicated access and that I couldn't really test it on my computer because the disabled people had special equipment that I didn't have.
Question- do the malls no longer have the disabled components we paid to have modified???
Also, has anyone heard from Oryan lately- I haven't seen any messages posted here lately with copies of emails people received from them.

In case you haven't been checking their site,...
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From the bankruptcy court site:
District of Nevada U.S.B.C.
National Audit Defense Network
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Subject:
3E. Virtual Mail Web Sites & Shopn2000
Last updated: 07/01/2004
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...they need to proofread -- it's "MALL", not "Mail"
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http://www.nvb.uscourts.gov/nvb/Documents.nsf/09e3860947325d9288256ea9005a5da4?OpenView
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The tax credit and deduction will be disallowed by the IRS and that the purported
"income" related to the promissory note will also be disregarded. See:
http://www.irs.gov/businesses/small/article/0,,id=106472,00.html
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this second link takes you to the IRS page regarding "Misuse of Disabled Access Credits"...
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...does "deduction" include downpayments and modification payments or any advertising or other expenses?...not clear, so just continue to monitor their site and these posts for updates. They have a good argument for denying the ADA tax credit, but NOT for denying the downpayments and modification payments and other expenses we paid to Oryan....I guess that's why there are lawyers and appeals processes.
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A ray of hope, or a lightning bolt from Heaven?
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Another "entity" has been working independent of our group to build a case of "IRS Complicity " or at the least, "Complacency and Failure to perform Oversight" in order to challenge denial of all deductions relating to the ADA credits, the mall down payments, the modification payments, and any other mall related deductions. I have no details to share, but they believe they have a strong case. I have been asked not to say anything about them beyond what I have posted here and that no one contact them; they will contact us if they need to. They read this Comment site, so that may be enough if we post what they need. They have asked one favor of us: please collect any information regarding the people who contacted you from NADN or Oryan or any of the third party companies. Any news articles or public stories about the founders or prominent figures with these companies are also sought. Glowing biographical stories, stories of what "pillars of the community" they were, and anything relating to their IRS background, etc., would be very useful. Bennington was considered almost a saint, according to many of the reports published about him. Several of them received public awards. These are the types of stories needed. Links to them would be acceptable as long as the links don't go dead before the information can be captured. Not tipping their hand, but they could use that information to place a lot of blame on the IRS itself using a legal term called "estoppel", a rule of evidence whereby a person is barred from denying the truth of a fact that has already been settled. In our case, that fact involves documented credentials that NADN "presented itself to the public" as former IRS employees, and the IRS never denied it, thus it is accepted as "truth".
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A case was won by an individual who checked into a hotel during a robbery. The robber assumed the identity of the desk clerk, whom he had tied up moments earlier, and actually checked the guest in. The guest gave him valuables to store in the safe and went to his room. The thief took the valuables along with the other loot and escaped. The guest successfully sued for the loss of the valuables using this rule because the court found the guest had every reason to believe the person checking him in was the legitimate employee of the hotel in whom he could entrust his valuables.
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Applying that rule to our case, evidence is being collected to argue that those who contacted us to sell us products and services for NADN presented verified credentials as former IRS tax experts, thus "representing" that their products and services were sanctioned by the IRS and that we could place our trust in them. That argument would be weak if the IRS had acted in a reasonable manner and within a reasonable time to stop or expose or refute their PUBLIC claims. Since they continued to make that claim PUBLICLY FOR YEARS with no denial by the IRS, clients had EVERY REASON TO BELIEVE that they were following the tax laws to the letter with the blessings of the IRS.
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The IRS had trained them in tax law and policy and never refuted their credentials; therefore, the IRS should be partially complicit since clients had EVERY REASON TO BELIEVE that the tax advice, tax preparation services, and the business venture that NADN offered represented the policies of the IRS. In the case I cited as precedence, it didn't matter that the hotel had no opportunity before the crime was committed to warn the guest or to deny that the person "representing" himself as a legitimate employee was even employed by the hotel. What mattered was that the guest had EVERY REASON TO BELIEVE that he was. This bodes even worse for the IRS because they had ample opportunity to deny NADN's PUBLIC claims. By taking NO action during the period NADN was preparing and filing fraudulent tax returns for clients and being accepted by the IRS, the IRS was not refuting the NADN claims of IRS credentials or of being in compliance with IRS rules and tax law; therefore, the IRS is partially complicit or grossly negligent or both. Four years is a long time for the IRS to sit idly by doing nothing to stop NADN from filing fraudulent tax returns or refute their public claims of IRS employment and compliance with all tax laws. At the very least, gross negligence on the part of the IRS oversight is apparent.

I was told that 4 outstanding, former IRS workers headed up NADN. The also used this information on the ad that I heard on the radio station about NADN. I really wish I could remember the 4 names.

I remember at least a one or two of the NADN "tax experts" who advised me to buy the mall business told me that they had bought it themselves. Whether or not that is true remains to be seen and these people haven't earned a lot of credibility.
Does anyone else reading this recall if the NADN sales person ever claimed that they had a mall too?
If this is true, this means that the people that lied to us are victims themselves??

Documents that arrived with my NADN welcome kit (about December 2000) provided very credible facts about NADN. It stated that NADN had nearly 1000 former IRS agents, CPAs, Tax Attorneys and enrolled agents from coast to coast. It specifically stated that their tax specialists included: a former IRS Deputy Commissioner, three former National Chiefs of the IRS Audit Division, a former Director of Practice for the US Treasury Dept, a former IRS Chief of Compliance, three former IRS District Directors and "far too many former IRS Senior Agents to list here".
* It also included a brochure stating NADN's Media experience in practically every major news program (CNN, CBS Washington, NBC National, Fox News, CNBC, Jim Lehrer, Capitol Watch, Alan Keyes and more), Radio (National Public Radio, Michael Reagan [there's a photo of Bob Bennington with Michael Reagan], G. Gordon Liddy, Chuck Harder, Janet Parhall and more) and Print (US News & World Report, Washington Times, Tampa Tribune)
* The welcome kit quoted George O'Leary, CEO Communications Resources "I was formerly a CPA with Peat Marwick Mitchell and Co;, and even with that, my relationship with NADN has saved me $150,000 this year." I THOUGHT IF A CPA BELONGED TO NADN IT MUST BE PRETTY COMPETANT.
* On one page of the welcome kit it said in bold green lettering: 'Never forget..When you're with NADN, you're safe from the IRS'. [WISH THEY HAD DELIVERED ON THAT PROMISE.]

Opaobie & RMarie,
Is it possible for RMarie to get her documents scanned into an electronic format (maybe an Office Max or Staples can do it for a nominal fee), email the electronic files to Chris or Opapbie to place on their website(s) as an attachement that others can download? Her documents are exactly what Opaobie says is needed by his "source". If others could see these documents it might provide them some hope that something could be done about bringing some justice to this matter for all us. It might motivate more people to join the class action lawsuit. On the ripoff report website a recent post was made by an attorney. Are there any attorneys among us who could provide legal assistance to the class action attorney?

I'm only guessing, but it seems that an argument such as the other folks appear to be preparing would be valid regardless of whether the malls ever met the ADA compliance or whether they ever were a viable business. Their argument seems to be based on gross failure of the IRS to perform their duties and protect taxpayers who faithfully followed the very instructions they now give to everyone who has contacted them trying to resolve our current problem: "seek the advice of tax experts before filing our returns". Remember, that's exactly how we got into this mess.
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By accepting the income tax returns without question for some three or four years, the IRS, in essence, assured taxpayers that their returns were correct and thus allowed NADN to continue and even expand its fraudulent practices, and that seems to constitute gross negligence on the part of the IRS. The IRS doesn't allow taxpayers to file inaccurate returns just because they are busy and don't have time to gather all the information needed, so an argument by the IRS that they had too high a workload to discover the errors in the returns shouldn't be accepted by an appeals panel either. If it hadn't been for people complaining and bringing the fraud to light, who knows how many more years it would have continued, and how many years worth of back taxes and penalties and interest we would be facing? It wouldn't surprise me to see a request for an investigation that could result in the firing of some IRS employees. Maybe we should contact our Representatives and Senators and ask them to look into our plight and initiate an investigation into the IRS. It couldn't hurt, but they are probably too busy eating $1000/plate rubber chickens trying to get reelected to bother investigating complaints from their constituents this year.
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Considering the fact that very crucial decisions affecting what is and is not deductible have not yet been made by the courts, as a minimum, the IRS should suspend any interest and penalties.
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I got a cynical email suggesting the whole situation was an IRS sting. They set up NADN with "former IRS experts" who then sold unsuspecting taxpayers on tax counseling and tax preparation and the malls. They ran the scam for three years to sink the hook deep, and then their buddies in the IRS are now "hauling in the catch". Pretty cynical, but it's as believable as anything else considering the situation we find ourselves in.

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Hey remember these:

http://64.233.167.104/search?q=cache:FdOY0JuhNhoJ:www.oryan-biz.com/Ashcroft.cfm%3Fp%3DDMI+Oryan-Biz&hl=en

http://64.233.167.104/search?q=cache:O0-mI4EPoAEJ:www.oryan-biz.com/President.cfm%3Fp%3DDMI+Oryan-Biz+++President+bush&hl=en

I don't think that a sting would go into those deep waters politically. Surely the hard sell tactics would be ruled entrapment.

Cool paranoid angle though, why did I not think of that. I love conspiracy theories. Like, maybe NADN & Oryan are subversive terrorist cells scamming hard earned American Bucks to secretly alter all Homeland Security Alerts to appear in only yellow, that's yellow, only yellow.

Seriously, in my mind, the DOJ & IRS are following these things in the way they are legally charged to do. The DOJ should protect the disabled against the crap that we were blindly brought into and at the same time protect us from the havoc that we've seen (we should not be twice a victim).The IRS needs to collect lawful taxes and we need to see that things are made whole in light of this entire mess, because "Right" should always be the trump card.

Look, tax credits are established all the time. Their purpose is to induce people to follow a certain path and ease the way toward a predetermined goal. Some of these credits are environmental, for example, they get the private sector to meet certain standards thereby maintaining ecologically sound operation and avoiding the more costly SUPERFUND and hind sight approach.
Education Credits are very well known, they pave the way for a more educated population to compete globally. The thought that people would send thier children to college just to get the tax credit is similar to the reasoning that you would buy an ADA-virtual mall strictly for the tax credit.
If you follow that to the ultimate conclusion then the IRS would investigate everyone who takes a tax credit, at all, starting with the largest corporate credits and working their way down.
Obviously the IRS is smarter than that. The DOJ has labeled this as a fraudulent tax scheme that NADN and others have sold. It was bought under false pretenses, making it a scam. I think that it is obvious to them that mall owners are innocents. What happened is not like someone who buys stolen articles or knock-offs from a person walking around on the street with no credentials. It is more like going into a reputable store front and buying displayed, priced, marketed items that turn out to be stolen or knock-offs.

Following the "I'll Drive" example, say I bought the stolen or knock-off item from a reputable store. I take it home. My house has a fire and the item is lost in the fire. When I claim it on my homeowners insurance, do I claim the price I paid, the "real" price, or some "reasonable" price in between? Besides the fraudulent claims by the IRS, it sounds like even if the IRS recognized the ADA tax credits and deductions for each mall owner (which doesn't sound like it will happen), the IRS is arguing that the amount of the $2,495 downpayment is overvalued. I think we should try to get price quotes from other "reputable" web developers for the type of services that Oryan was suppose to provide. I have been pursuing this idea but if anyone else has relatively easy access to this type of information it would be helpful to share it with us or at least get it to opaobie. This information would be helpful rebutting a challenge from the IRS with regards to our amended tax returns. We would be able to show that the expenses are "ordinary and reasonable". Maybe someone has access to surveys of web development and hosting costs.

I have spent several hours reviewing all the posts on this site yesterday and today. I, too, was taken in by NADN to the tune of 3 "malls", a $1500 "Business Plan" supposed to pay off my notes and start making $600 a month within 6 months, a $500 re-up of my gold membership, etc., etc.

Anyone who purchased an upgrade to ShopN2000 in 2002 should have a copy of that letter from Wes Coolidge - I do.

I have been in contact with the DOJ people putting the case together. Based on several phone conversations with me, they put together an 11-page "Declaration" from me about my experiences with NADN, Oryan, Success Matrix, IFG, and AGW. I think they are probably doing the same with anyone who contacted them or filled out their questionnaire.

One point on the IRS being complicit in the scam - when I submitted my 2002 tax return (prepared by me, not NADN), I claimed the ADA tax deduction/credit per NADN's instructions; but I wrote down the wrong form number on my 1040 for the tax credit. The IRS found a minor error in another schedule on my return and sent me an amended refund amount. I sent a letter back to them reclaiming the credit and explaining that I had inadvertantly written down the incorrect form number. They immediately refunded the additional amount resulting from that request.

Given this "extra attention" to my return/refund, why would I ever expect that they would now be denying the validity of the tax credit claims and wanting us to return any money we received as a result?

Opaobie, you are doing a wonderful job of keeping everyone posted and trying to get the lawsuit started.

Has anyone sent Chris's two website addresses containing these posts to the DOJ or the IRS? They could both learn a lot from them.