Bitcoin Patron Michael Saylor and MicroStrategy Face US Lawsuit Over Tax Fraud Allegations
Michael Saylor and the company he founded, MicroStrategy, are staring at legal action in Washington, D.C. over tax fraud, per an announcement from D.C. Attorney General, Karl Racine. The complaint alleges that Saylor knowingly avoided income taxes to the state of Washington D.C. by fraudulently claiming to be a resident of a lower tax jurisdiction while maintaining his residence in D.C. Additionally, the complaint alleges that cloud software company MicroStrategy conspired with Saylor by intentionally obfuscating his real address to local and federal tax authorities.
In its complaint, the Attorney General’s office alleges that Saylor “fraudulently purported” to be a resident of either Florida or Virginia in order to take advantage of substantially lower tax rates. However, his Facebook posts, which are included in the complaint, prove that he maintained his domicile in Washington, D.C.
NEW: Today, we’re suing Michael Saylor – a billionaire tech executive who has lived in the District for more than a decade but has never paid any DC income taxes – for tax fraud.
— AG Karl A. Racine (@AGKarlRacine) August 31, 2022
The billionaire allegedly bragged to his confidants about masquerading as a Florida resident in order to avoid paying taxes in the District of Columbia. He registered to vote in Florida and obtained a driver’s license there despite not abandoning the district as his domicile.
It’s the 1st lawsuit brought under DC’s recently amended False Claims Act encouraging whistleblowers to report residents who evade our tax laws by misrepresenting their residence. Led by @ChmnMendelson, @councilofdc unanimously updated the law & gave us enforcement authority.
— AG Karl A. Racine (@AGKarlRacine) August 31, 2022
This lawsuit is the first such litigation brought under the authority of the District’s recently passed False Claims Act, Racine tweeted. The office is looking to recover what could amount to more than $100 million (roughly Rs. 798 crore) in unpaid income taxes and penalties from Saylor and MicroStrategy.
MicroStrategy holds the largest number of Bitcoin among public companies — holding 1,29,699 BTC as of June 30, worth about $2.6 billion (roughly Rs. 20,765 crore). Saylor, meanwhile, is also a known vocal supporter of the industry.
The development comes after Saylor stepped aside as MicroStrategy’s CEO in early August but remained chairman of the board; he also assumed a substantive executive position focusing on “Bitcoin acquisition strategy and related Bitcoin advocacy initiatives.”
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