MicroStrategy's Michael Saylor accused of dodging $25 million in DC tax after he showed off his luxury penthouse flat on Facebook
- MicroStrategy boss Michael Saylor evaded $25 million in District of Columbia taxes, its AG alleges.
- The bitcoin bull claimed to live in Florida, but Facebook posts showed homes in DC, according to a lawsuit.
MicroStrategy co-founder Michael Saylor has been hit with a lawsuit by the District of Columbia's attorney-general for allegedly evading more than $25 million in income taxes.
The lawsuit published Wednesday also names MicroStrategy — the enterprise software maker Saylor ran as CEO until early August — which it claims conspired to help the noted bitcoin bull evade district taxes.
The AG's office alleges Saylor pretended to be a resident of either Florida or Virginia for more than 20 years, when he was actually living in Washington, DC. It noted that he failed to file any income tax return in DC between 2005 and 2021, and that Florida and Virginia have significantly lower tax rates.
"Since at least 2012, Saylor has bragged to his confidants about his successful plan to create the illusion of residing in Florida in order to evade the District's personal income taxes," the lawsuit filing said.
The suit presented screenshots of apparent Facebook posts by Saylor in 2012 as evidence the MicroStrategy executive chairman had lived in several different homes in DC. The posts showcase a luxury penthouse on the Georgetown waterfront that he allegedly spent millions of dollars to renovate, plus yachts docked on the Potomac.
"View from my Georgetown balcony this morning," Saylor wrote on the social-media site in 2012, according to the suit. "Now I just need to finish renovating the apartment so I can move back in."
People who live in Washington, DC for at least 183 days are classified as residents and required to file income tax returns and pay any money due.
MicroStrategy spent almost $4 billion on bitcoin under Saylor's leadership. He said in April he considers the stock to be an unofficial spot bitcoin ETF.
The leading cryptocurrency was trading below $20,000 at last check Thursday, according to CoinMarketCap data, down about 1% in the last 24 hours.
"As MicroStrategy is one of the biggest Bitcoin holders, crypto investors began to panic about whether Michael Saylor would have to liquidate some Bitcoin to pay for the consequential fines," GlobalBlock strategist Marcus Sotiriou said. "Whatever the outcome, I think investors are likely overreacting to this story."
The suit alleges that MicroStrategy knew Saylor was a DC resident but didn't report it to the authorities, meaning the company conspired to help Saylor in the tax avoidance.
"The District of Columbia's claims against the company are false and we will defend aggressively against this over-reach," MicroStrategy told the Financial Times.
MicroStrategy shares fell 6.3% Wednesday when the lawsuit was announced, and were down 2.8% Thursday just ahead of the opening bell. The stock was trading at $224.01 at last check.
Saylor told the FT he lives in Florida and he disagreed with the lawsuit. Insider contacted MicroStrategy for comment from the company and its executive chairman on the allegations, but had not received a reply at time of writing.
The AG's office is seeking to recover unpaid income taxes and penalties from Saylor and his company that it believes could add up to more than $100 million.
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