The “Situation” – aka Michael Paul Sorrentino – has been indicted for ignoring his personal tax situation; the “Jersey Shore” MTV reality star was indicted for tax evasion. The U.S. District Court of New Jersey filed an indictment against Sorrentino, accusing the 33-year-old of “conspiracy to defraud the United States.”
The 15-page Department of Justice filing claims that Sorrentino held position in at least two businesses structured as limited liability companies – MPS Entertainment and Situation Nation. According to the brief, MPS “purportedly engaged in the business of exploiting the defendant’s celebrity status through various means, including but not limited to personal and television appearances, product endorsements, and sales of various consumer products.”
Both companies were established as “pass-through entities.” In other words, as an LLC, profits (and any losses) generated by the business pass through to the owners, who in turn report out to the IRS on their personal 1040 tax returns. Which is all fine and good, except that the LLC owners cannot conspire to use gross profits to defeat tax by purchasing things like “luxury vehicles, designer clothing and personal grooming expenses,” and then fail to inform their LLC accountants, which is what prosecutors say happened.
The NY Times had an interesting take on the whole situation:
“Somehow, the most shocking thing about the indictment of Michael Sorrentino for tax fraud is not that the ‘Jersey Shore’ star may have been less than punctilious about paying the taxman. After all, Mr. Sorrentino, known as ‘The Situation,’ has never projected the levelheaded public image you’d associate with careful income tax compliance. (Here is a video in which he slams his head into a wall. Here is the 911 call from when he was in a brawl at a tanning salon).”
What was shocking to the Times (and the rest of us) was the amount that the U.S. District Court alleged these “companies” generated – nearly $9 million from 2010 forward.
There’s big business evidently in ab-flashing and vitamin endorsements.
The spikey-haired Sorrentino – along with the Situation’s older brother Marc – pleaded not guilty in Newark Federal Court Wednesday. Each face 15-years behind bars if convicted.
When asked to comment, the younger Sorrentino said: “No, I’m not worried about it. That’s why I pleaded not guilty.”
This from a man whose self-proclaimed motto is “Gym, tan, laundry.”
Writes the NY Daily News:
The Situation and his brother are portrayed in the indictment as dumb and dumber for thinking they could hoodwink the IRS by cooking the books with a bunch of bologna.
“Rather than living in reality and reporting their true income, Michael Sorrentino and his brother Marc created the illusion that they earned less income by filing false and fraudulent tax returns,” said IRS Special Agent Jonathan Larsen.