First U.S. Crypto Tax Evader Sentenced to Prison in Historic Case

Frank Richard Ahlgren III, an Austin, Texas man, has made history as he becomes the first crypto tax evader to face a jail term. According to a report , Ahlgren III has bagged a two-year sentence for falsely claiming his capital gains from Bitcoin (BTC) between 2017 and 2019. Ahlgren’s Deceptive Crypto Tax Evasion Scheme As per the case, Ahlgren III sold $3.7 million worth of Bitcoin but underreported it, marking the first criminal tax evasion solely based on cryptocurrency. According to court documents, Ahlgren III did not report or underreport the sale of $4 million worth of BTC. Ahlgren III, who invested in Bitcoin as early as 2011, purchased 1,366 BTC in 2015 using the Coinbase exchange. In October 2017, he decided to sell 640 BTC and used the funds to purchase a house in Park City, Utah. Ahlgren’s crime was lying to his accountant about the gains from the Bitcoin sales. He submitted a false summary of the gains. Notably, Ahlgren inflated the price at which he bought the Bitcoin, which is reflected in his 2017 federal tax income returns. Justice Department Explains Ahlgren’s Crime Interestingly, Ahlgren attempted to hide his BTC sales through the use of multiple wallets and also by exchanging Bitcoin for cash in person. All these should have been reported in his 2018 and 2019 tax returns. To account for his capital gains, Ahlgren engaged in blogging about mixers in May 2014. Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division, noted that Ahlgren engaged in these lies despite earning millions. Rather than pay the taxes due from the trading of Bitcoin, Ahlgren chose to conceal his gains using different methods that eventually earned him a two-year sentence. Ahlgren’s case marks a shift from the several enforcements by the Securities and Exchange Commission (SEC). Notably, the SEC has condemned corporate entities for noncompliance with regulatory guidelines. IRS Sounds Warning to Potential Tax Evaders In her remarks, Lucy Tan, acting special agent in charge of IRS-criminal investigation at the Houston Field Office, advised crypto traders to avoid tax evasion. According to her, with the current bullish cycle that has driven crypto prices high, some might be tempted not to pay taxes. Tan emphasized that such temptation could lead to a jail term in a federal prison. Many countries, including Russia are fine-tuning their crypto laws on tax to create clear ambiguity and formalize the sector. The post First U.S. Crypto Tax Evader Sentenced to Prison in Historic Case appeared first on TheCoinrise.com .