- A Texas Bitcoin investor is sentenced for evading taxes on $4 million worth of Bitcoin gains.
- IRS warns crypto users to follow tax rules to avoid criminal charges and penalties.
- Roger Ver faces tax evasion charges over $48 million, highlighting global crypto tax issues.
The U.S. Department of Justice (DOJ) has charged a Texas Bitcoin investor with tax evasion. This is the first criminal prosecution for tax evasion linked to crypto. Frank Richard Ahlgren III, who has invested in Bitcoin since 2011, allegedly failed to report capital gains on roughly $4 million worth of Bitcoin.
Ahlgren bought 1.366 Bitcoins in 2015 through Coinbase. At that time, Bitcoin’s price ranged from $495 to $5,807 per coin. By October 2017, Ahlgren had sold around 640 Bitcoins for $3.7 million.
However, Ahlgren lied to his accountant about his Bitcoin purchase prices when filing his 2017 federal tax return. He inflated the prices to reduce his taxable gain and submitted a false return. Following the investigation, U.S. District Court Judge Robert Pitman sentenced Ahlgren to two years in prison for tax evasion. The judge also ordered Ahlgren to pay $1,095,031.
Warnings from Authorities
Acting Special Agent in Charge Lucy Tan from IRS-Criminal Investigation said this case is a warning to anyone trying to avoid taxes through crypto assets.
Tan stated that this case demonstrates that no one is above the law. The DOJ and IRS are increasing their enforcement actions. People involved in crypto transactions must follow tax reporting rules to avoid criminal charges.
Other Bitcoin Tax Evasion Cases
Earlier this year, Roger Ver, known as “Bitcoin Jesus,” faced tax evasion charges. He allegedly avoided over $48 million in taxes after selling $240 million worth of cryptocurrency.
Read also: Crypto Tax Evaders Face Crackdown in South Korea
Ver’s case is complex because he renounced his U.S. citizenship in 2014. He allegedly did this to bypass the “exit tax” requirement. This highlights the intersection of crypto holdings and international tax laws.
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