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DC Attorney General is suing billionaire Michael Saylor for alleged income tax evasion

DC Attorney General is suing billionaire Michael Saylor for alleged income tax evasion
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DC Attorney General Karl A. Racine (D) announced a lawsuit against it on Wednesday Billionaire Michael J. Saylor and the technology company he co-founded MicroStrategywho claims that Saylor has lived in DC for more than a decade, avoiding $25 million in DC income taxes – and that MicroStrategy is conspiring to help him.

That legal action, the Racine on 8/22 in DC Superior Court alleging that Saylor fraudulently claimed to be a resident of lower tax countries for years despite living in a 7,000-square-foot penthouse on the Georgetown waterfront. The complaint further alleges that MicroStrategy, despite knowing that Saylor was a DC resident, conspired to participate in the program “rather than accurately reporting his address to local and federal tax authorities and withholding county taxes correctly.” Both Saylor and MicroStrategy issued statements Wednesday denying the allegations in the lawsuit.

The complaint alleges that Saylor purchased the Georgetown property in 2005 before purchasing two adjacent penthouse units and combining them into a single residence, which Saylor calls “Trigate,” and also a penthouse unit in Adams bought Morgan. According to the complaint, beginning in 2012, Saylor bought a home in Miami Beach, obtained a Florida driver’s license, and registered there to vote, although he resided primarily in DC. The lawsuit alleges he did not pay DC income taxes at any point between 2005 and 2021, despite Social media posts over the years suggesting he lived in DC and considered it home.

“Since at least 2012, Saylor has bragged to his intimates about his successful plan to create the illusion of residing in Florida to avoid the district’s personal income taxes,” the complaint reads. The lawsuit alleges that MicroStrategy facilitated the fraud by agreeing to list Saylor’s residence on federal tax forms as his Florida home, even though he knew he lived in DC, “in order to actively help Saylor meet his obligation to pay to evade taxes on the district”. (Florida has no state individual income tax).

Saylor said in his statement that he bought the Miami Beach home a decade ago after moving from Virginia.

“Although MicroStrategy is based in Virginia, Fla., I live, vote, serve on jury duty, and it is central to my personal and family life,” he wrote. “I respectfully disagree with the position of the District of Columbia and look forward to a fair resolution in court.”

Saylor founded MicroStrategy in 1998 and served as CEO until earlier this month when the public company announced that he would accept a new role as executive chairman. In a Aug 2 press release In announcing the change in leadership, MicroStrategy said that Saylor will remain chairman of the board of directors.

In a statement of its own, MicroStrategy denied the allegations and vowed to “aggressively defend itself against this exaggeration.”

“The case is a personal tax matter involving Mr. Saylor,” the statement said. “The Company has not been responsible for its day-to-day affairs and has not overseen its individual tax obligations. Nor has the Company consulted with Mr. Saylor the fulfillment of his personal tax obligations.”

Racine’s office said the lawsuit was placed under the city’s authority recently expanded False Claims Act, which the DC Council amended last year to include tax-related issues and provides incentives for whistleblowers to uncover tax fraud. Racine said the law also allows the court to impose a penalty of up to three times the amount of the tax evaded, and that between the unpaid income taxes and other penalties his office wants to recover from Saylor and MicroStrategy, the damage in this case could amount to more than 100 million dollars.

The lawsuit builds on a similar lawsuit filed against Saylor by whistleblowers in DC Superior Court last year unsealed Wednesday. Racine’s office said it independently investigated the tax fraud allegations and intervened in the whistleblower complaint by filing its own lawsuit against Saylor and MicroStrategy.

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