DC AG: MicroStrategy’s Saylor Evaded Taxes, Bragged About It

Bitcoin bull Michael Saylor shells out $40M, D.C.’s biggest tax case, to end a probe into alleged evasion.

Michael Saylor on a boat holding up his piggy bank.
Created by Kornelija Poderskytė from DailyCoin
  • DC attorney general blasted MicroStrategy and its chair, Michael Saylor, for tax evasion.
  • MicroStrategy and Saylor have settled the case for $40 million, but deny any wrongdoing.
  • It is thought investigations began after Saylor had bragged about losing Bitcoin in a boating accident in 2021.

MicroStrategy is the biggest public company holder of Bitcoin, having accumulated a massive war chest of 214,400 BTC, valued at around $15 billion at current prices. The enterprise software firm’s aggressive treasury strategy, spearheaded by its chair, Michael Saylor, has made it a proxy for the world’s largest cryptocurrency.

Sponsored

Saylor has been one of Bitcoin’s most vocal evangelists since MicroStrategy made its first purchase in August 2020. Many in the space now consider the billionaire tech executive the “face of Bitcoin” as a result. However, Saylor’s reputation has taken a major hit after the District of Columbia (D.C.) Attorney General Brian Schwalb accused him of evading taxes and bragging about his exploits.

MicroStrategy and Saylor Under Fire

Attorney General Schwalb’s tax evasion statements dealt a major blow to Saylor’s image as an upstanding citizen and Bitcoin ambassador. According to Schwalb, Saylor will pay a $40 million settlement to end the investigation, making this case the biggest tax fraud recovery in D.C.’s history.

Schwalb stated, “Tax cheats freeload off the backs of hardworking, law-abiding, taxpaying Washingtonians while depriving the District of critical resources for public services including public safety, infrastructure, and education.” He firmly added that no one is above the law, regardless of their wealth or standing.

Despite the statements from Schwalb, the settlement terms allow MicroStrategy and Saylor to deny violating any applicable tax laws, while also admitting no wrongdoing as part of the agreement. 

The allegations against MicroStrategy and Saylor can be traced back to a 2022 investigation launched by the previous D.C. attorney general.

Saylor Accused of Bragging 

This incident stemmed from a 2022 investigation launched by then-D.C. attorney general Karl Racine, who accused Saylor of evading over $25 million in taxes and alleged that MicroStrategy had colluded with its chair in the tax avoidance scheme.

Sponsored

According to Racine’s complaint, Saylor had deliberately avoided paying taxes owed to D.C. by falsely claiming to reside in other lower-tax jurisdictions. Investigations revealed that Saylor maintained multiple luxury residences around D.C., including a 7,000-square-foot penthouse in Georgetown and mooring privileges for a yacht along the Potomac River.

At the time, Saylor denied the charges, claiming he had purchased a home in Miami Beach, Florida in 2012 and established it as his new primary residence after leaving Virginia, D.C.

Influencer “db” alleged that the 2022 probe began after Saylor openly bragged about using Bitcoin to evade taxes in a 2021 interview. Footage circulating on the internet showed Saylor running through a hypothetical where Bitcoiners can claim to lose their holdings in a “boating accident” if pushed too hard by tax authorities.

On the Flipside

  • Saylor‘s actions were seen by authorities as flaunting wealth and encouraging others to dodge taxes.
  • It is estimated the U.S. government has lost $2.4 trillion in making simple payment errors over the last 2 decades.
  • U.S. debt repayment is forecast to reach $870 billion in 2024.

Why This Matters

This case signals that tax authorities are not afraid to target the ultra-wealthy by making an example of Saylor. It also reflects intensifying efforts to scrutinize crypto-related assets.

Read about Jim Crammer’s latest call on Bitcoin and MicroStrategy stock.
Jim Cramer Backs Bitcoin, Warns Against MicroStrategy Stock

Trader Peter Brandt forecasts the Bitcoin top using past halving analysis.
Brandt Predicts Bitcoin Top with Halving Analysis

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Samuel Wan

Samuel Wan is a finance professional turned crypto journalist, known for his insightful reporting on market trends, regulatory changes, and technological developments within the digital asset industry. His ability to simplify complex concepts and report the facts has made him a trusted source in the crypto community. Beyond his writing, Samuel is an active mountain biker and gamer.