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Michael Saylor and MicroStrategy to Pay $40M to Settle Tax Evasion Lawsuit

by BSC News

June 3, 2024

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This historic settlement, the largest in the city's history, centers on allegations that Saylor falsely claimed to reside in Florida to avoid paying over $25 million in D.C. taxes from 2005 to 2021.

MicroStrategy CEO and prominent Bitcoin advocate Michael Saylor has agreed to a historic $40 million settlement with Washington D.C. to resolve a tax evasion lawsuit. 

This settlement is reportedly the largest income tax deal ever recorded in the city's history, highlighting the high stakes involved in the case.

 

It is also notable as the first lawsuit under the district's amended False Claims Act, which encourages whistleblowers to report tax evasion by residents hiding their true residence.

The Case Against Saylor and MicroStrategy

The case, brought forth by Attorney General Brian L. Schwalb, focused on Saylor's residency and tax returns spanning from 2005 to 2021. 

While Saylor claimed to be a resident of Florida, city attorneys presented evidence suggesting he lived in a luxury apartment and on yachts within the District of Columbia's jurisdiction. This discrepancy led to the lawsuit filed in August 2022, alleging that Saylor had not paid any income taxes in D.C. for over a decade, during which he purportedly resided there.

 

The District of Columbia's lawsuit also accused MicroStrategy of conspiring to assist Saylor in evading taxes. The attorney general's office estimated that Saylor avoided paying more than $25 million in taxes to the district by falsely claiming residency elsewhere. These actions, they argued, amounted to a significant loss of revenue for the city.

Saylor's Denial and Settlement

Both Saylor and MicroStrategy denied the tax evasion allegations as part of the settlement agreement. Despite his denial, Saylor choose to settle the matter to avoid the prolonged burden of litigation on himself, his friends, and his family. 

“Florida remains my home today, and I continue to dispute the allegation that I was ever a resident of the District of Columbia,” Saylor told the New York Times.

Despite his claims, evidence reportedly showed he lived within D.C. Court documents alleged that Saylor used his position at MicroStrategy to falsify or omit address information on W-2 forms issued to him. As per reports, he chose Florida because it has no personal income tax and Virginia due to its lower income taxes compared to D.C.

Saylor's Bitcoin Advocacy

Michael Saylor is a well-known figure in the cryptocurrency community, renowned for his substantial investments in Bitcoin and his active presence on social media. 

 

Saylor's journey to becoming a Bitcoin billionaire began in 2020 when he announced his personal purchase of 17,732 BTC for $175 million on Twitter. This marked a significant shift from his earlier skepticism about Bitcoin. 

 

As of June 2024, Forbes ranks Saylor among the 700 richest people in the world, with a net worth of $4.6 billion. Under his leadership, MicroStrategy invested $4.5 billion in nearly 130,000 bitcoins, cementing the company's reputation as a major cryptocurrency player. 

Disclaimer

Disclaimer: The views expressed in this article do not necessarily represent the views of BSCNews. The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. BSCNews assumes no responsibility for any investment decisions made based on the information provided in this article

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