While I’ve met some weirdos in my time who don’t mind paying taxes, I’ve never met anyone who actively enjoys doing it. Even the self-described ‘socialists’ I know who advocate for rich people paying a very high income-tax rate typically advocate for other people paying such a rate, rather than volunteer to do so themselves.
Still, given a choice between spending months (or years) behind bars and paying taxes, I’m firmly of the opinion it’s better to give the Tax Man his due.
Happily, it has been almost 10 years since the last high-profile incident I can recall involving a porn performer being jailed for tax evasion – the six-month stint to which Janine Lindemulder was sentenced back in late 2008. (I wouldn’t be one bit surprised if there have less-publicized cases since then, but none of have hit my radar, so far as I can recall.)
Given the porn industry’s penchant for copying mainstream trends though, a week in which two mainstream entertainment stars are in the news for getting into hot water over tax evasion seems like a good time for those of us in the adult industry to remind ourselves that, bothersome and painful in the pocketbook though it may be, paying taxes isn’t optional.
Beyond that, if you’re determined not to pay taxes as the law requires, you should probably conceal your real income in a way which is hard to detect. At the very least, you should try to make it harder to notice than splitting up a cash deposit into three pieces, which you then deposit on the same day into three different accounts, for example.
Unfortunately for Michael “The Situation” Sorrentino, he of Jersey Shore gym, tan and laundry fame, his attempt to avoid taxes amounted to such easily-spotted chicanery. Worse, that chicanery has just resulted in an eight-month jail sentence, payment of restitution, two years of supervised release, 500 hours of community service, ongoing financial disclosure requirements, proscribed mental health treatment, restrictions on his accrual of debt in the future and plenty of ongoing attention from his brand-new besties over at the Internal Revenue Service.
The Situation was originally indicted just over four years ago, along with his brother Marc “The Man” Sorrentino. In that indictment, the Brothers Sorrentino were charged with conspiracy to defraud the United States, filing false tax returns and failure to file a tax return.
Last year, a superseding indictment was filed against the Sorrentinos, adding two counts of structuring to evade currency transaction reports, nine counts of aiding in the preparation of false tax returns and a single count each of tax evasion and falsification of records.
A glimpse at the superseding indictment reveals just how unsophisticated the Sorrentinos’ scheme to evade taxes was, particularly when it came to how the brothers handled their cash deposits.
Through a variety of companies, including MPS Entertainment LLC, Situation Nation Inc. (“SitNat”), Situation Productions, Situation Capital Investments LLC and GTL Management Inc., the indictment states the Sorrentinos “entered into numerous contracts for (the Situation) “to make personal appearances at various venues, including nightclubs, bars, and liquor stores, in exchange for booking fees.”
As part of the deals they’d make for such appearances, the Sorrentinos “contracted that a substantial portion of the booking fee be paid in cash directly” to the brothers, who would then report only a portion of the income from those booking fees.
A chart included in the indictment shows a pattern of The Situation making several cash deposits into his various business accounts on the same day, or in consecutive days, with the total amount exceeding the $10,000 mark which triggers reporting requirements for the bank. In some instances, Sorrentino would deposit $4,500 into an account for Situation Productions on one day, and another $3,500 the following day, while depositing an additional $4,500 in an account for Situation Nation the same day(s).
In another instance, on March 14, 2011, Sorrentino deposited $8,800 cash into the Situation Productions account, along with $2,000 cash each into two different personal accounts, all on the same day.
By pleading guilty to the charges against him, Michael Sorrentino has avoided an even worse ‘situation,’ because as part of the plea agreement, prosecutors dropped eight of the counts pending against him.
Of course, one doesn’t have to be an American to run afoul of tax laws, as demonstrated by the recent $70 million fine levied against Fan Bingbing by the Chinese government for her tax-evading ways. In her case, Fan’s tax-evasion has inspired China’s State Administration of Taxation to craft new regulations of the film and television industry, under which production companies to conduct self-audits.
The moral of the story, whether the tale is told in English or Chinese, is quite simple: The Tax Man wants his cut – and his desire is backed up by statutes which require us to give him that cut.
Don’t get me wrong; I’m sure plenty of people have gotten away with shorting the Tax Man over the years. The question isn’t whether you can get away with shorting the Tax Man, though. The question is whether the benefit of keeping a few extra bucks in your pocket is worth the risk of being kept in the state’s ‘pocket’ – also known as a “correctional facility” – for months or years of your life.
As for The Situation, it appears he’s taking his impending sentence in stride.
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