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The District of Columbia Attorney General Karl Racine has recently accused the Co-Founder of MicroStrategy Michael Saylor of tax fraud. The lawsuit states that Saylor evaded around $25 million in district taxes. As per the lawsuit, Saylor has never paid any DC income tax even though he has lived in the District of Columbia for over ten years and earned millions of dollars.

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Furthermore, the AG’s Office also named MicroStrategy as a defendant in the lawsuit. MicroStrategy is a publicly traded company that offers business intelligence services. The lawsuit states that MicroStrategy helped and conspired with Saylor in tax evasion. Therefore, the AG’s Office is aiming to recover over $100 million in unpaid taxes and penalties.

The Case is a Personal Tax Matter of Saylor, Says MicroStrategy

Previously, Saylor stated that he lives in Virginia or Florida. These states have very minimal to no personal income tax rates. However, he owned and lived in several states around D.C. including Saylor’s penthouse apartment in Georgetown. The lawsuit also contained several screenshots of Saylor’s Facebook posts over the last few years. These posts referred to the balcony view of his Georgetown home.

It has been alleged that MicroStrategy had prior information that Saylor was a permanent DC resident. But the company chose to withhold this information. The lawsuit further stated that Saylor and MicroStrategy reached an agreement to hide his potential tax evasion. But the firm released a statement to deny these accusations.

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MicroStrategy said, “The case is a personal tax matter involving Mr. Saylor. The Company was not responsible for his day-to-day affairs and did not oversee his individual tax responsibilities. Nor did the Company conspire with Mr. Saylor in the discharge of his personal tax responsibilities. The District of Columbia’s claims against the Company are false and we will defend aggressively against this overreach.”

On the other hand, Saylor states that while MicroStrategy is located in Virginia, he himself lives in Florida. He further said, “I respectfully disagree with the position of the District of Columbia, and look forward to a fair resolution in the courts.”

According to the Racine office, this is the first lawsuit under the newly passed False Claims Act. As per the act, the district law will incentivize those who will report tax fraud. Thereafter, the court will impose penalties on those who are proven guilty. The penalty could be up to three times the tax evaded amount.

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