According to TechFlow, on December 13, the U.S. Department of Justice issued a document stating that Frank Richard Ahlgren III, a resident of Austin, Texas, was sentenced to two years in prison for falsely reporting $3.7 million in Bitcoin trading income. Court documents show that Ahlgren began investing in Bitcoin in 2011 and purchased about 1,366 Bitcoins through Coinbase in 2015, with the highest price of about $495.56 that year. In October 2017, he sold 640 Bitcoins at a price of about $5,807.53 per coin, making a profit of $3.7 million, which he used to buy a house in Park City, Utah.
In order to evade taxes, Ahlgren provided false transaction records to the accountant, falsely reporting that the purchase cost was much higher than the actual price. From 2018 to 2019, he concealed more than $650,000 in Bitcoin transaction records through multiple wallet transfers, face-to-face cash transactions, and coin mixers. His tax evasion caused more than $1 million in tax losses. In addition to sentencing him to prison, the court also required him to pay $1,095,031 in compensation.
IRS Criminal Investigation Special Agent Lucy Tan from the Houston office emphasized that this is the first case entirely focused on cryptocurrency tax evasion, which will serve as an important warning to the industry. Currently, the IRS Criminal Investigation Division and the Texas Attorney General's Office are conducting further investigations into the case.
