The civil case, filed Tuesday in Las Vegas by the Justice Department and Internal Revenue Service, accused the National Audit Defense Network (NADN), a group of related companies and 13 individuals, of selling phony home-based Internet businesses that promise thousands of dollars in tax credits under the Americans with Disabilities Act (ADA).

The suit also seeks to bar the group and four of the individual defendants from preparing federal income tax returns, and asks the court to order the defendants to turn over their customer lists.

"The scale of this scheme is truly staggering," Internal Revenue Commissioner Mark W. Everson said in a written statement. "As we've said time and time again, people shouldn't fall prey to schemes and scams. No matter how slick the sales pitch, taxpayers should be wary of anyone promising to eliminate their taxes. There is no secret way to escape paying taxes, either through a home-based business or any other scam."

Scott McTaggert, a Las Vegas lawyer who represents NADN, said yesterday he had not seen the government's complaint and could not comment. Paul W. Raymond, a Newport Beach, Calif., lawyer who represents two of the individuals, said his clients, without admitting wrongdoing, had agreed to a permanent injunction and were cooperating with the government. Lawyers for other defendants did not respond to requests for comment left at their offices or on their answering machines.

According to the government, NADN has been cheating both its own customers and the IRS. The company and related firms sold bogus Web sites, home-based businesses and incorporation packages that purport to entitle the buyer to big write-offs, the charges said.

After paying fees, customers are supposed to be able to claim to have a business with a Web site, and thus be able to claim tax deductions and credits for "modifying" the site to comply with the ADA, the government's complaint said. The government said the group charges customers $2,495 each to modify the Web site, plus a sham $7,980 promissory note meant to inflate the total cost to $10,475. It said the network tells purchasers that they can claim $5,000 ADA income-tax credits and $5,475 business tax deductions.

In reality, according to court papers, purchasers never received their own Web sites or their own ADA modifications. Instead, NADN was selling a single Web site over and over -- 17,000 times, the government said. The supposed modifications to comply with ADA were made only once, though each purchaser was charged, and the activity did not qualify for a tax break, according to the court papers.

The government said that although the sites were sold as businesses, the sales pitches drop "any pretense that NADN is selling a real business and confirms that it is selling a purported tax credit wrapped in a so-called website."

More than two years ago, the Federal Trade Commission brought a complaint against NADN for allegedly failing to honor its money-back guarantee. FTC attorney Janice L. Charter said that case remains in litigation, but is awaiting the outcome of a bankruptcy filing last summer.

Also yesterday, the Justice Department announced the indictment of seven California residents associated with a tax-preparation service that allegedly prepared 16,000 fraudulent tax returns on which a total of $47 million in tax refunds were claimed between 1998 and 2001.

The seven included Samuel Joseph DeAngelo, and all were associated with DeAngelo Tax Service of Yorba Linda and Western Tax Service of Anaheim. DeAngelo is also represented by Raymond, who said his client denies wrongdoing.

The government said the service charged $300 to $1,700 for returns that took less than 30 minutes to prepare. It said the returns contained inflated deductions for items such as charitable gifts, business expenses and depreciation.

-- Albert B. Crenshaw