MicroStrategy Accused Of Conspiracy As Former CEO Gets Sued For Tax Fraud

Michael Saylor, the former CEO of MicroStrategy and a long time Bitcoin (BTC) enthusiast, has recently been sued for reportedly failing to pay over $25 million in taxes. Saylor says that he is a resident of Florida, where he claims to have lived for more than half the year, voted, and even reported for jury duty, but the Districts case contends that he is also a resident of Washington D.C.

According to the Attorney Generals office, Saylor, whose net worth is estimated to exceed $1 billion, has resided in a 7,000 square foot waterfront penthouse in Washington D.C.&39s Georgetown neighborhood since around 2015. Additionally, he also has at least two luxury yachts docked in the area, thereby further indicating that this is his true abode rather than what Michael claims which is Florida.

Whats going on?

The lawsuit, announced this past Wednesday by D.C. Attorney General Karl Racine, claims that MicroStrategy knew Saylor resided in Washington for more than half the year as it retained access to personal information regarding his whereabouts in addition to allegedly conspiring to assist him evade taxes.

Any individual is subject to District tax liability if they are domiciled in the District or establish statutory residency in the District, according to the law. Saylor has been a statutory resident of the District, or domiciled, in each year from 2013 to 2020, according to the complaint.

As such, a person can be a statutory resident of D.C. if they have a place of abode in the district. It also states that Saylor spent less than three months in Florida from 2013 to 2020 and always returned to Washington, D.C. This round trip, so it has been said, demonstrates that his true home is in the District, not Florida.

As per the lawsuit, Saylors reported address was therefore that of his house in Florida rather than his true place of abode, which is a clear tax violation. Moreover, as was ascertained through voter records, despite registering to vote in Florida, Saylor has never actually voted in person in the state, according to the complaint.

What now?

The former MicroStrategy CEO insists that he has always resided in Florida for most of the year, however the crux of  the issue is that this particular case isnt about that as it has more to do with where Saylor is actually settled.

Every tax jurisdiction in the world takes this into account otherwise, the wealthy would shuttle between low-tax jurisdictions and their home base to avoid paying taxes. Washington, D.C. has a special provision for this, namely the Part-time D.C. resident classification. This category accounts for those who spend a portion of the year in the District despite not having a statutory residence.

As such, the Attorney Generals office stated that it was attempting to retrieve unpaid income taxes and penalties from Michael and MicroStrategy, which could very well be over $100 million before all is said and done. No matter what happens though, this is a wake-up call for everyone to take their taxes seriously and ensure that everything is in order, as even the slightest slip up could have disastrous consequences.