Crypto Tax Fraud Results in Prison Sentence
A Texas man was sentenced to two years in prison for filing inaccurate tax returns between 2017 and 2019. He reportedly omitted $3.7 million in income from Bitcoin transactions.
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A Texas man was sentenced to two years in prison for filing inaccurate tax returns between 2017 and 2019. He reportedly omitted $3.7 million in income from Bitcoin transactions.
Frank Richard Ahlgren III, an Austin, Texas resident, has been sentenced to two years in prison for tax evasion involving cryptocurrency transactions. This groundbreaking conviction is the first U.S. case targeting tax fraud tied exclusively to crypto.
In 2015, Ahlgren bought 1,366 Bitcoins on Coinbase. Two years later, in October 2017, he sold 640 BTC for $3.7 million, partially funding a home purchase in Park City, Utah.
Between 2017 and 2019, he repeatedly falsified his tax filings, either underreporting or completely omitting his crypto-related income.
Legal filings unveiled that Ohlgren engaged in tax fraud by exaggerating the acquisition costs of his Bitcoin to understate his taxable income. To further mask his activities, he utilized multiple digital wallets, converted Bitcoin into cash, and relied on cryptocurrency mixers to cover his tracks on the blockchain.
Frank Ahlgren III earned millions buying and selling bitcoins, but instead of paying the taxes he knew were due, he lied to his accountant about the extent of a large portion of his gains. That conduct today earned him a two-year sentence,
stated Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the DOJ’s Tax Division.
DOJ. Source: justice.gov
Adding its perspective, the IRS stressed the case’s importance for tax enforcement.
As the prices for cryptocurrency are high, so is the temptation to not pay taxes on its sale. Avoid the temptation and avoid federal prison,
advised Lucy Tan, Acting Special Agent in Charge of IRS Criminal Investigations, Houston.
IRS. Source: Fortune
This landmark case establishes a vital precedent, empowering U.S. authorities to enhance enforcement of cryptocurrency tax laws.
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