MicroStrategy and Former CEO Sued for Tax Evasion in DC

Bitcoin maximalist, Michael Saylor and MicroStrategy, a cloud computing software company he co-founded, are now facing a lawsuit filed by DC Attorney General Karl A. Racine.

According to the lawsuit, Saylor, between the years 2014 through 2020 allegedly claimed to be a Florida resident while he owned and occupied several properties in DC. Racine said Saylor evaded tax worth over $25 million during this period

On its part, MicroStrategy is accused of conspiring with its former CEO to evade tax payments. 

The lawsuit claimed that MicroStrategy intentionally hid Saylor’s real address from local and federal tax authorities, and filed the same in documents submitted with the regulators. Therefore, the attorney general’s office is seeking over $100 million in accrued unpaid income tax and penalties for the specified duration.

Michael Saylor says he respectfully disagrees with the attorney general’s position and looks to the court for a fair resolution. “Florida is where I live, vote, and have reported for jury duty, and it is at the center of my personal and family life,” the billionaire added.

MicroStrategy Inc’s Response to the Tax Lawsuit

Microstrategy in response to the lawsuit, says the case is a personal tax matter involving Mr. Saylor. 

The firm added that it is not responsible for Saylor’s day-to-day activities; neither did it oversee his tax responsibilities nor conspire with him in the discharge of his tax responsibility.

Therefore the firm described its inclusion in the lawsuit as an “overreach”.

The lawsuit against Michael Saylor and MicroStrategy is the first under the recently amended False Claims Law. The law encourages whistleblowers to report anyone who misrepresents their residences to evade tax laws.

Earlier in the month, Saylor left his role as MicroStrategy’s CEO and he now occupies the executive chairman position and focuses on the firm’s Bitcoin strategy as well as other initiatives.

The vocal Bitcoin enthusiast gained prominence while leading MicroStrategy through its several Bitcoin acquisitions. MicroStrategy now holds 129,699 BTC as of June 2022 making it the largest corporate holder of the digital currency. 

The firm spent almost $4 billion on these acquisitions at an average price of $30,650 per BTC. The crash in market price means the firm’s Bitcoin investment is currently underwater.