United States Attorney Joe Kelly announced that Tony Merksick, 43, of Council Bluffs, Iowa, was sentenced today in Omaha, Nebraska by Chief United States District Judge John M. Gerrard to three years’ probation for Filing a False Tax Return. Merksick’s probation will include special conditions that Merksick not gamble while on probation and that the first year of probation be served in home confinement. Merksick was also ordered to pay $100,285.00 in restitution to the Internal Revenue Service.
Merksick operated an online bookkeeping operation for gambling. In 2009, Merksick created TJM Enterprises, Inc., an S-Corporation, for the purposes of reporting a portion of that income from the gambling operation to facilitate obtaining loans, mortgages, and other financing. S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates.
During the investigation, special agents with the IRS interviewed clients of Merksick to determine the proceeds that Merksick was receiving from his gambling operation. Merksick’s, his wife’s, and TJM Enterprises, Inc.’s bank accounts were also reviewed. In Tax Year 2012, Merksick reported that TJM Enterprises’ gross receipts as $163,249 on a Form 1120S, which he signed under penalties of perjury. The investigation revealed that TJM Enterprises’ gross receipts for 2012 were $501,072.95. In Tax Year 2013, Merksick reported that TJM Enterprises’ gross receipts as $150,957 on a Form 1120S, which he signed under penalties of perjury. The investigation revealed that TJM Enterprises’ gross receipts for 2013 were $233,520.60.
Merksick was the sole shareholder of TJM Enterprises, Inc. The resulting tax loss on Merksick’s personal taxes that were suffered by the United States due to Merksick’s underreporting TJM Enterprises, Inc.’s gross receipts was $63,976.00 for Tax Year 2012 and $36,309.00 for Tax Year 2013. The total tax loss for Tax Year 2012 and Tax Year 2013 was $100,285.00.
“Over 10 years ago, Mr. Merksick created TJM Enterprises for the purposes of reporting a portion of the income from the gambling operation he ran to facilitate obtaining loans, mortgages, and other financing, while underreporting more than $100,000 in gross receipts on tax returns filed with the IRS in 2012 and 2013,” said Adam Steiner, Acting Special Agent in Charge of the IRS Criminal Investigation division in the St. Louis Field Office. “Those attempting to use schemes to defraud the tax system should know that IRS CI and the U.S. Attorney’s Office will continue their pursuit to protect the integrity of the tax system.”
This case was investigated by IRS Criminal Investigations.