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Michael Saylor’s Tax Evasion Tactics Cost Him $40 Million: Roger Ver Faces Similar Charges

Last Updated June 4, 2024 10:19 AM
James Morales
Last Updated June 4, 2024 10:19 AM

Key Takeaways

  • Michael Saylor and MicroStrategy have agreed to pay $40 million to settle tax fraud charges.
  • A lawsuit accused Saylor of falsely claiming residency in Florida while spending the majority of his year in Washington, D.C.
  • Meanwhile, Roger Ver stands accused of dodging a $28 million Bitcoin tax bill.

When Roger Ver was arrested in Spain last month, the US Department of Justice accused him of providing inaccurate information to dodge a $48 million tax bill. But Ver isn’t the only famous Bitcoin investor who has attracted the ire of tax authorities.

On Monday, June 3, the Washington, D.C. attorney general’s office reported that Michael Saylor and the company he founded, MicroStrategy, have agreed to pay $40 million to settle a tax fraud lawsuit 

Micheal Saylor’s Tax Residency Controversy

According to Attorney General Brian Schwalb, between 2005 and 2021, Saylor evaded over $25 million in District of Columbia income taxes by claiming tax residency elsewhere. 

While Saylor owns a property in Miami Beach and is registered to vote in Florida, the lawsuit alleged that in reality, he spent the majority of each year at his apartment in Washington. It also argued that MicroStrategy was implicated in the alleged fraud because the firm misrepresented Saylor’s residency, using his Florida address in its tax forms.

Both Saylor and Microstrategy have denied the charges and the latest settlement doesn’t acknowledge any wrongdoing on behalf of either party.

Largest Tax Recovery in D.C. History

In a statement , Schwalb said the multimillion-dollar settlement is the largest income tax recovery in D.C. history.

“Tax cheats are freeloading off the backs of hardworking, law-abiding, taxpaying District residents while depriving our city of resources needed for critical programs,” he asserted. “Michael Saylor and his company, MicroStrategy, defrauded the District and all of its residents for years. Indeed, Saylor openly bragged about his tax-evasion scheme, encouraging his friends to follow his example, and contending that anyone who paid taxes to the District was stupid.”

Does Microstrategy Tax Fraud Have Anything to Do With Bitcoin?

Founded as a business intelligence firm in 1989, since 2020, MicroStrategy has become known as one of the world’s largest Bitcoin holders.

That same year, Saylor disclosed that he personally held 17,732 BTC for which he paid an average of $9,882 each. Assuming he hasn’t sold any, Saylor’s Bitcoin stash is worth over $1.2 billion today.

If he were to sell his crypto, Saylor would be liable to pay capital gains tax. However, his BTC holdings were not mentioned in the D.C. lawsuit.

Implications for Roger Ver

Like Saylor, Ver’s legal troubles relate to his tax status. However, in Ver’s case, he stands accused of failing to properly report his assets when he renounced US citizenship in 2014.

United States law demands that high net-worth individuals renouncing their citizenship must pay an exit tax based on the “deemed sale” of their worldwide assets. 

To calculate his expatriation tax liability, Ver enlisted the help of a law firm and two appraisers to assess the value of two companies he owned: MemoryDealers.com Inc. and Agilestar.com Inc.

However, the Justice Department claims Ver lied to them about the number of BTC he and his companies controlled.

Facing a potential prison sentence, Ver might do well to follow Saylor’s example and settle the case outside of court.

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