DC Attorney General Sues Billionaire for Alleged Income Tax Evasion
WASHINGTON — Washington, D.C., is accusing billionaire corporate mogul Michael Saylor of evading $25 million in local income taxes in a whistleblower lawsuit filed last week.
The District of Columbia’s attorney general says Saylor fraudulently claimed he lived in Florida and Virginia while his company, MicroStrategy Inc., helped him in the tax evasion.
Saylor made a fortune off cryptocurrency investments after becoming the largest corporate buyer of Bitcoin. Forbes magazine estimates his net worth at $2.3 billion.
Until he resigned last month, Saylor was chief executive officer of MicroStrategy, a Tysons, Virginia-based company that provides analytics, mobile software and cloud-based services to other businesses.
The lawsuit filed in D.C. Superior Court says that Saylor began living in a luxury Georgetown penthouse in 2005 and docked his yachts on the Potomac riverfront.
He calls his home “Trigate” after he purchased three side-by-side condominiums and had them combined into a single roughly 7,000-foot home during a multi-million dollar renovation.
“Despite being a District statutory resident and domiciliary, not once during the period from 2005 through 2021 did defendant Saylor file an income tax return with, or pay any income taxes to, the District’s Office of Tax and Revenue,” the lawsuit says. “Instead, defendant Saylor fraudulently purported to be a resident of either Virginia or Florida, jurisdictions that have materially lower income tax rates.”
It also says, “Defendant MicroStrategy knew that Saylor was in fact a District resident, but instead of accurately reporting his address to local and federal tax authorities and correctly withholding District taxes, the company conspired with defendant Saylor to facilitate his tax avoidance scheme.”
D.C. Attorney General Karl Racine announced the lawsuit on Twitter.
He acknowledges that Saylor also owns a home in Miami Beach but says he typically spent more than half a year at his home in Georgetown, which made him subject to local income taxation.
Racine was tipped off by an unidentified whistleblower who filed a False Claims Act complaint in April 2021.
The whistleblower complaint says, “Demonstrating his disdain for the rules that everyone else has to live by, Saylor publicly flaunted his billionaire lifestyle while bragging to his friends and associates about how he was evading District taxes.”
Saylor denied the allegations. MicroStrategy issued a statement saying, “The District of Columbia’s claims against the company are false and we will defend aggressively against this overreach.”
Shares of MicroStrategy fell 3.6% to $231.56 after Racine announced the lawsuit. The stock has lost about 57% of its value this year as the price of Bitcoin also declined.
Tom can be reached at firstname.lastname@example.org or on Twitter at @tramstack.