The U.S. Department of Justice (DOJ) recently revealed a case involving Frank Richard Ahlgren III, an early Bitcoin investor from Texas, who admitted to falsifying his tax returns regarding cryptocurrency gains. According to court documents, Ahlgren underreported his capital gains after selling Bitcoin, leading to significant tax discrepancies.
Ahlgren initially purchased 1,366 Bitcoins in 2015, with each Bitcoin valued at less than $500 at the time. In October 2017, he sold 640 of these Bitcoins for a total of around $3.7 million, using the proceeds to purchase a house in Park City, Utah. However, on his 2017 tax return, Ahlgren overstated his initial purchase price (cost basis) for the Bitcoins, thus reducing his reported capital gains.
In addition to the discrepancies in 2017, Ahlgren failed to report $650,000 worth of Bitcoin sales over the next two years, 2018 and 2019. The DOJ emphasized that Ahlgren’s actions resulted in the Internal Revenue Service (IRS) losing more than $550,000 in potential tax revenue.
Ahlgren faces up to three years in prison, along with possible supervised release, restitution, and fines. His sentencing will take place at a later date.
This case is another example of how tax evasion related to cryptocurrency is becoming an increasingly prominent issue, with the IRS and DOJ working to hold individuals accountable for their financial reporting in the digital asset space.
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<p>The post Early Bitcoin Investor Charged with Tax Evasion After Falsely Reporting Crypto Gains first appeared on CoinBuzzFeed.</p>
