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Michael Magnaldi, formerly of Pelham, who now lives in Florida, pleaded guilty in White Plains federal court to one count of aiding and assisting in the filing of false tax returns for tax years 2014 to 2017 and one count of subscribing to a false tax return in 2016.
U.S. Attorney Geoffrey Berman said that between 2014 and 2017, Magnaldi prepared 37 false Forms 1040 that contained, false information, false Schedule D capital losses, false Individual Retirement Account contribution deductions, and false Education Tax credits.
Magnaldi unsuccessfully attempted to conceal his role in preparing those fraudulent returns by not listing his or any name as the return preparer, to make it seem as if the returns were self-prepared.
In response to IRS correspondence audits, Magnaldi caused additional false forms to be sent to the IRS, in an attempt to substantiate the false losses, deductions, and credits claimed on the tax returns.
The total tax loss for the 37 false individual income tax returns of Magnaldi’s clients was $232,767.
Additionally, Magnaldi also falsely understated his own and his business’s income on their 2016 tax returns, the same year he bought a $705,000 home in Pelham. The tax loss for Magnaldi’s understatement of flow-through income is $243,417.
The total tax loss resulting from both schemes is $476,184.
Berman noted that Magnaldi has years of audit experience in the New York City Department of Finance, and he has owned and operated MGM Tax Solutions in the Bronx since 2014.
“After serving in the New York City Department of Finance for 15 years, Michael Magnaldi betrayed the public’s trust by engaging in a years-long pattern of preparing false returns for clients and falsely understating his own income the same year he bought a $705,000 home in Pelham,” Berman said. “Magnaldi’s fraudulent conduct undermined the government’s ability to fund its mandates and cost the government $476,184 in tax revenue. As we enter tax filing season, Magnaldi now stands convicted of two counts of criminal tax charges and awaits sentencing for his crimes.”
When he is sentenced, Magnaldi, 54, is facing up to three years in prison. He has also been ordered to pay $476,184, plus interest and penalties to the IRS. He is scheduled to be sentenced on Friday, May 8.
“As the tax season heats up, this is an important reminder to taxpayers to beware of unscrupulous tax return preparers.” IRS-CI Special Agent-in-Charge Jonathan Larsen said. “Fraudulent tax return preparers harm taxpayers, legitimate businesses, and the American public. IRS-CI is steadfast in its commitment to ending such tax fraud and today’s guilty plea shows the serious consequences for violating this nation’s tax laws.”
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