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IRS Targets Former Citizen Because He "Caused A Loss To The IRS"
Posted on 5/3/24 at 2:25 pm
Posted on 5/3/24 at 2:25 pm
Surprised this hasn't been mentioned here yet. SIAP if it has.
The X post sums up what happened and includes a link to the DOJ filing.
Basically, the guy had a ton of bitcoin that he personally held and held in a couple corporations. He renounced his citizenship in 2014. After he was no longer a citizen, he moves some bitcoin from his corporations to himself. And during the first massive surge in 2017, he sells a ton of it and makes big money.
Now, in 2024, the IRS is coming after him for those bitcoin he sold in 2017, after he was no longer a citizen. He was arrested in Spain to be extradited back to the States.
The whole story is wild.
The X post sums up what happened and includes a link to the DOJ filing.
Basically, the guy had a ton of bitcoin that he personally held and held in a couple corporations. He renounced his citizenship in 2014. After he was no longer a citizen, he moves some bitcoin from his corporations to himself. And during the first massive surge in 2017, he sells a ton of it and makes big money.
Now, in 2024, the IRS is coming after him for those bitcoin he sold in 2017, after he was no longer a citizen. He was arrested in Spain to be extradited back to the States.
The whole story is wild.
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Posted on 5/3/24 at 2:27 pm to Knartfocker
What is 80,000 IRS agents getting fired?
A good start.
A good start.
Posted on 5/3/24 at 2:38 pm to Knartfocker
Not sure it’s straight forward if he purposely withheld distribution of the bitcoins. I pay Japanese taxes when Nintendo pays me a dividend. Not sure I can avoid that without going to jail.
Posted on 5/3/24 at 2:40 pm to Knartfocker
quote:
Ver and his companies allegedly owned approximately 131,000 bitcoins
Nice.
Reading the indictment, he gone.
Posted on 5/3/24 at 2:41 pm to Knartfocker
No idea if this guy under reported his btc holdings or not but a Twitter account drumming up noise about double taxation without acknowledging foreign tax credits is not tax savvy enough for me to listen to.
Posted on 5/3/24 at 2:42 pm to C
quote:
Not sure it’s straight forward if he purposely withheld distribution of the bitcoins. I pay Japanese taxes when Nintendo pays me a dividend. Not sure I can avoid that without going to jail.
Yeah he didn't follow the law.
You can bitch and complain about what the law is, but he did not follow it, regardless.
quote:
On Feb. 4, 2014, Ver allegedly obtained citizenship in St. Kitts and Nevis and shortly thereafter renounced his U.S. citizenship in a process known as expatriation. As a result of his expatriation, Ver allegedly was required under U.S. law to file tax returns that reported capital gains from the constructive sale of his world-wide assets, including the bitcoins, and to report the fair market value of his assets. He was also allegedly required to pay a tax – referred to as an “exit tax” – on those capital gains. By Feb. 4, 2014, Ver and his companies allegedly owned approximately 131,000 bitcoins that traded on several large exchanges for around $871 each. MemoryDealers and Agilestar allegedly held approximately 73,000 of those bitcoins.
Ver allegedly hired a law firm to assist him with his expatriation and to prepare his expatriation-related tax returns. Ver also allegedly hired an appraiser to value his two companies. Ver allegedly provided or caused to be provided false or misleading information to the law firm and appraiser that concealed the true number of bitcoins he and his companies owned. As a result, the law firm allegedly prepared and filed false tax returns that substantially undervalued the two companies and their 73,000 bitcoins and did not report that Ver owned any bitcoins personally.
The indictment further alleges that by June 2017, Ver’s two companies continued to own approximately 70,000 bitcoins. Around that time, Ver allegedly took possession of those bitcoins and in November 2017 sold tens of thousands of them on cryptocurrency exchanges for approximately $240 million in cash. Even though Ver was not then a U.S. citizen, he was still legally required to report to the IRS and pay tax on certain distributions such as dividends from MemoryDealers and Agilestar, which were U.S. corporations. Ver allegedly concealed from his accountant that he had received and sold MemoryDealers’ and Agilestar’s bitcoins that year. As a result, Ver’s 2017 individual income tax return did not report any gain or pay any tax related to the distribution of MemoryDealers’ and Agilestar’s bitcoins to him.
Posted on 5/3/24 at 2:49 pm to Knartfocker
Tyrants
Posted on 5/3/24 at 2:52 pm to Jack Carter
there are a lot of blue states that come after your retirement benefits on moving to another state.
Posted on 5/3/24 at 2:54 pm to Knartfocker
Its harder to not be a us citizen than to become one.
Posted on 5/3/24 at 2:56 pm to Knartfocker
I know Bitcoin Jesus
Posted on 5/3/24 at 3:01 pm to Knartfocker
Here’s the release:
quote:
An indictment was unsealed yesterday charging Roger Ver, an early investor in bitcoins, with mail fraud, tax evasion and filing false tax returns. Ver was arrested this weekend in Spain based on the U.S. criminal charges. The United States will seek Ver’s extradition to stand trial in the United States.
According to the indictment, Ver formerly of Santa Clara, California, owned MemoryDealers.com Inc. and Agilestar.com Inc., two companies that sold computer and networking equipment. Starting in 2011, Ver allegedly began acquiring bitcoins for himself and his companies. He also allegedly avidly promoted bitcoins, even obtaining the moniker “Bitcoin Jesus.”
On Feb. 4, 2014, Ver allegedly obtained citizenship in St. Kitts and Nevis and shortly thereafter renounced his U.S. citizenship in a process known as expatriation. As a result of his expatriation, Ver allegedly was required under U.S. law to file tax returns that reported capital gains from the constructive sale of his world-wide assets, including the bitcoins, and to report the fair market value of his assets. He was also allegedly required to pay a tax – referred to as an “exit tax” – on those capital gains. By Feb. 4, 2014, Ver and his companies allegedly owned approximately 131,000 bitcoins that traded on several large exchanges for around $871 each. MemoryDealers and Agilestar allegedly held approximately 73,000 of those bitcoins.
Ver allegedly hired a law firm to assist him with his expatriation and to prepare his expatriation-related tax returns. Ver also allegedly hired an appraiser to value his two companies. Ver allegedly provided or caused to be provided false or misleading information to the law firm and appraiser that concealed the true number of bitcoins he and his companies owned. As a result, the law firm allegedly prepared and filed false tax returns that substantially undervalued the two companies and their 73,000 bitcoins and did not report that Ver owned any bitcoins personally.
The indictment further alleges that by June 2017, Ver’s two companies continued to own approximately 70,000 bitcoins. Around that time, Ver allegedly took possession of those bitcoins and in November 2017 sold tens of thousands of them on cryptocurrency exchanges for approximately $240 million in cash. Even though Ver was not then a U.S. citizen, he was still legally required to report to the IRS and pay tax on certain distributions such as dividends from MemoryDealers and Agilestar, which were U.S. corporations. Ver allegedly concealed from his accountant that he had received and sold MemoryDealers’ and Agilestar’s bitcoins that year. As a result, Ver’s 2017 individual income tax return did not report any gain or pay any tax related to the distribution of MemoryDealers’ and Agilestar’s bitcoins to him.
In total, Ver is alleged to have caused a loss to the IRS of at least $48 million.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Martin Estrada for the Central District of California made the announcement.
Posted on 5/3/24 at 3:02 pm to C
quote:
Not sure it’s straight forward if he purposely withheld distribution of the bitcoins. I pay Japanese taxes when Nintendo pays me a dividend. Not sure I can avoid that without going to jail.
I think the years in question make things a bit more complicated. 2017 was the first year normal people took BTC seriously. It went up to $20k for the first time. At that time, governments really didn't have a way to handle crypto. There really wasn't a way to report it and the skyrocketing price caught everyone off guard. No one, let alone the government, gave a shite about crypto in 2014
Posted on 5/3/24 at 3:03 pm to Trevaylin
quote:
there are a lot of blue states that come after your retirement benefits on moving to another state.
I know New York will go to the ends of the earth to collect state tax after you move to another state. You have to dot every i and cross the very t to prove full year out of state residency if you are a high earner and flee NY.
Posted on 5/3/24 at 3:03 pm to Jorts R Us
Believe all x posts
Posted on 5/3/24 at 3:03 pm to SlowFlowPro
So now you are in tax law?
Id have to look into this but they provided laws and guidance of this in 2019 and going after him from pre 2017?
The government is awesome.
Id have to look into this but they provided laws and guidance of this in 2019 and going after him from pre 2017?
The government is awesome.
This post was edited on 5/3/24 at 3:06 pm
Posted on 5/3/24 at 3:03 pm to Knartfocker
That’s not really the focus.
The focus is the alleged false reporting of what he and his companies held when he caused his exit return to be completed.
The focus is the alleged false reporting of what he and his companies held when he caused his exit return to be completed.
Posted on 5/3/24 at 3:06 pm to dgnx6
quote:
So now you are in tax law?
Well I did take 4 tax law classes in law school and my graduate thesis was in tax policy....but I just posted the link in the twitter summarizing the indictment for y'all.
Posted on 5/3/24 at 3:08 pm to boosiebadazz
quote:
That’s not really the focus.
The focus is the alleged false reporting of what he and his companies held when he caused his exit return to be completed.
In direct response to his point, it was clearly property that would be subject to capital gains taxing.
Posted on 5/3/24 at 4:03 pm to SlowFlowPro
quote:
In direct response to his point, it was clearly property that would be subject to capital gains taxing.
I'm no tax lawyer or expert. Found the story to be genuinely fascinating. Reading through the PDF sounds damning, but I keep going back to what crypto was like in 2013-2014. I don't remember it being considered a property subject to capital gains until after 2017. Prior to that it was just a nerdy toy.
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