MicroStrategy, Michael Saylor settle with DC AG for $40M in income tax fraud case

DC AG Brian Schwalb said the case is the “largest income tax fraud recovery” in DC history

June 3, 2024 10:56 am

DCStockPhotography/Shutterstock modified by Blockworks

Michael Saylor and MicroStrategy will pay $40 million to resolve a tax fraud case with the Washington DC Attorney General’s office.

AG Brian Schwalb posted about the resolution in a series of X posts.

The case marks the “largest income tax fraud recovery” in DC history, Schwalb said.

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“Saylor illegally pretended to live in lower-tax jurisdictions to avoid paying taxes on hundreds of millions of dollars of income — all while living in a 7,000 square foot Georgetown penthouse and docking multiple yachts at Washington Harbour,” Schwalb added.

According to court documents, MicroStrategy and Saylor will pay a total of $40 million to resolve the case.

The case, filed with a DC court last year, alleged that Saylor evaded over $25 million in DC income taxes between 2005 and 2021. Saylor, the government said, posed as a resident in states like Florida and Virginia, which have lower taxes.

MicroStrategy was also named in the suit, with the DC AG alleging that the company helped to cover up his DC residency.

“The false records and statements MicroStrategy submitted to the District Office of Tax and Revenue, which Defendant Saylor caused the company to submit, deprived the District of tens of millions of dollars in income tax revenue,” the filing said.

Saylor, a big bitcoin bull, is worth over $4.6 billion according to Forbes. MicroStrategy owns 1% of all bitcoin, worth a total of $14 billion.

He embarked on a — previously disclosed — share sale spree earlier this year, unloading 315,000 shares of MSTR, though the executive chairman and co-founder still holds a sizable position in his company.

MicroStrategy didn’t immediately respond to a request for comment.

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