Crypto Tax Evasion- Bitcoin Investor Convicted for Tax Evasion: Underreported $4M in Gains
Crypto Tax Evasion– An early Bitcoin investor from Austin, Texas, has become the first individual criminally charged for failing to report crypto capital gains, involving approximately $4 million worth of cryptocurrencies. Frank Richard Ahlgren III, a long-time Bitcoin investor, has been accused by the U.S. Department of Justice (DOJ) of underreporting capital gains from Bitcoin sales made between 2017 and 2019.
Crypto Tax Evasion: Ahlgren’s False Reporting
According to a report from the DOJ on December 12, Ahlgren, who has been investing in Bitcoin since 2011, sold $3.7 million worth of Bitcoin between 2017 and 2019 but did not report the realized capital gains. The DOJ emphasized that all taxpayers are required to report any sale proceeds and gains or losses from the sale of cryptocurrency, such as Bitcoin, on a tax return.
Ahlgren initially bought 1,366 BTC in 2015 at a price under $500 each, on the Coinbase exchange. He later sold approximately 640 BTC in October 2017 at an average price of $5,807.53, netting about $3.7 million. Instead of reporting the gain, Ahlgren filed a false 2017 federal income tax return, inflating the cost basis of his Bitcoin holdings and underreporting the capital gains. This discrepancy led to further scrutiny by authorities.
Failure to Report Additional Bitcoin Sales
Further investigations revealed that Ahlgren had also failed to report Bitcoin sales amounting to over $650,000 in 2018 and 2019. The DOJ reported that Ahlgren attempted to hide the movement of his funds by using various methods, including wallet transfers, crypto mixers, and even in-person cash transactions.
In May 2014, Ahlgren had written about his knowledge of mixers, which are tools designed to add anonymity to cryptocurrency transactions. The DOJ highlighted that Ahlgren’s actions caused a tax loss exceeding $1 million.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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