TLDR
- Michael Saylor, the co-founder and Executive Chairman of MicroStrategy, has agreed to pay a $40 million settlement to the District of Columbia regarding allegations of tax evasion.
- This settlement is the largest income tax fraud recovery in the history of the District of Columbia.
- Saylor was accused of evading over $25 million in D.C. income taxes by falsely claiming to be a resident of Florida or Virginia, which have lower tax rates than D.C.
- MicroStrategy was also accused of helping Saylor conceal his true place of residence for tax purposes.
- Despite the settlement, Saylor maintains that he was never a resident of the District of Columbia and that Florida remains his home.
Michael Saylor, the co-founder and Executive Chairman of MicroStrategy, has agreed to pay a $40 million settlement to the District of Columbia regarding allegations of tax evasion.
This settlement represents the largest income tax fraud recovery in the history of the District of Columbia, according to Attorney General Brian Schwalb.
The allegations against Saylor date back to August 2022, when the District of Columbia sued him and MicroStrategy, accusing Saylor of evading over $25 million in D.C. income taxes.
The lawsuit claimed that Saylor falsely claimed to be a resident of either Florida or Virginia, which have lower tax rates than the District of Columbia, in order to avoid paying the higher taxes in D.C.
The District of Columbia alleged that Saylor engaged in a “fraudulent scheme” to deprive the District of tax revenue on “hundreds of millions of dollars in income” that he earned while living in D.C.
The attorney general’s office claimed that Saylor “publicly flaunted his billionaire lifestyle while bragging to his friends and associates about how he was evading District taxes.”
MicroStrategy, the software company co-founded by Saylor, was also implicated in the lawsuit. The District of Columbia alleged that MicroStrategy helped Saylor conceal his true place of residence for tax purposes.
Despite the settlement, Saylor continues to refute the claims made against him. In a statement to The New York Times, Saylor said,
“Florida remains my home today, and I continue to dispute the allegation that I was ever a resident of the District of Columbia.” He added, “I have agreed to settle this matter to avoid the continued burdens of the litigation on friends, family, and myself.”
MicroStrategy has made headlines in recent years for its large investments in Bitcoin, becoming one of the largest corporate holders of the cryptocurrency.
As of May 1, 2024, the company reported holding 214,400 BTC, which were purchased at an average price of $35,000 per BTC, with a total cost of around $7.5 billion.
Saylor has been a vocal advocate for Bitcoin and has frequently shared his bullish views on the cryptocurrency on social media platforms like Twitter.
However, his journey to becoming a Bitcoin billionaire only began in 2020, when he announced that he had personally bought 17,732 BTC for $175 million.
Prior to that, Saylor had expressed skepticism about Bitcoin, stating in 2013 that “Lacking a credible sponsor, Bitcoin is in imminent danger of being regulated out of existence.”
The settlement between Saylor, MicroStrategy, and the District of Columbia marks the resolution of a high-profile tax evasion case involving one of the most prominent figures in the cryptocurrency industry.
While Saylor has agreed to pay the $40 million settlement, he maintains his stance that he was never a resident of the District of Columbia and that the allegations of tax evasion were unfounded.
