Michael ‘The Situation’ Sorrentino’s Accountant Admits Tax Fraud Conspiracy

Legal troubles continue for Jersey Shore’s Michael “The Situation” Sorrentino. His accountant, the man who helped prepare tax returns for brothers Michael and Marc Sorrentino, has admitted filing fraudulent tax returns on their behalf. The accountant is Gregg Mark, 51, of Spotswood, New Jersey. He pleaded guilty to an information charging him with one count of conspiracy to defraud the United States.

The accountant admitted preparing fraudulent tax returns for the Sorrentinos for 2010 and 2011. The Sorrentinos and their businesses, MPS Enterprises LLC and Situation Nation Inc., are said to have received millions of dollars in income. However, fraudulent business and personal tax returns ended up depriving the IRS of $550,000 to $1.5 million.

TV personality Mike'The Situation' Sorrentino attends the premiere party for the third season of Marriage Boot Camp Reality Stars hosted by WE tv on May 28, 2015 in West Hollywood, CA. (Photo by Jerod Harris/Getty Images for WE tv)

TV personality Mike’The Situation’ Sorrentino attends the premiere party for the third season of Marriage Boot Camp Reality Stars hosted by WE tv on May 28, 2015 in West Hollywood, CA. (Photo by Jerod Harris/Getty Images for WE tv)

The case goes back to Sept. 24, 2014, when a grand jury in Newark returned a seven-count indictment charging the Sorrentinos with conspiracy to defraud the United States and filing false tax returns. Michael Sorrentino was also charged with failing to file a tax return. According to the indictment, the brothers received several million dollars in connection with Michael Sorrentino’s role as a cast member on MTV’s “Jersey Shore” as well as from other promotional activities.

The brothers are charged with failing to report all of the income they received. They are also charged with claiming personal expenses as business expenses. The specifics include payments for luxury vehicles and high-end clothing. They are also alleged to have made distributions – or direct payments – from the businesses to their personal bank accounts. Both brothers have pleaded not guilty; a trial date has not yet been set.

The conspiracy charge to which the accountant pleaded guilty carries a statutory maximum sentence of five years in prison and a $250,000 fine. Sentencing of the accountant is scheduled for March 24, 2016. In the meantime, the charges against Michael Sorrentino and his brother Marc have not been proven. Yet the accountant’s guilty plea cannot be good news for the Sorrentinos. The Indictment is serious, with an alleged $8.9 million in income alleged to have escaped taxes. Mike faces two counts of filing false returns, while his brother faces three.

Plus, each also faces a count of conspiracy. Ironically, the most blatant mistake—filing to file a tax return—might be least serious. That was one lesson from Wesley Snipes’ famous tax case. Failure to file is a misdemeanor, but filing falsely is a felony. You must file a tax return each year with the IRS if your income is over the requisite level. And you sign tax returns under penalties of perjury.

The charges allege that Mike Sorrentino failed to file a tax return in 2011, a year in which he pulled in more than $1.95 million in income. The brothers allegedly conspired to fail to pay federal taxes on income generated by two companies they controlled, MPS Entertainment, LLC and Situation Nation, Inc. Michael Sorrentino has so far managed to delay the trial. The case involves voluminous records, and this gives both of the Sorrentino brothers more time. But not all of the delays appear to be about trial preparation. At one point, the Situation prevailed upon the court to delay a court appearance so he could tape ‘Marriage Boot Camp’ in Los Angeles. The trial was supposed to begin Sept. 9, but it was postponed because he failed to pay his attorney.

For alerts to future tax articles, email me at Wood@WoodLLP.com. This discussion is not intended as legal advice.

via The Tax Lawyer http://ift.tt/228iQVG

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