An early Bitcoin investor falsely reported gains, causing the IRS to lose more than $550,000 in taxes, and faces up to three years in prison
The U.S. Department of Justice (DOJ) recently announced that an early Bitcoin investor admitted to "filing a tax return that falsely reported his cryptocurrency gains." Texas resident Frank Richard Ahlgren III admitted to underreporting his capital gains from the sale of $3.7 million worth of Bitcoin.
According to court documents, Ahlgren purchased 1,366 Bitcoins in 2015, each worth no more than $500. In October 2017, he sold 640 Bitcoins for approximately $3.7 million and used the proceeds to purchase a home in Park City, Utah. However, Ahlgren's 2017 tax return incorrectly overstated his cost basis for purchasing Bitcoin, thereby underreporting capital gains. Additionally, he failed to report $650,000 in Bitcoin sales in 2018 and 2019.
“In total, Ahlgren caused the IRS to incur more than $550,000 in tax losses,” the Justice Department noted.
Ahlgren will be sentenced at a later date. He faces up to three years in prison, as well as a period of supervised release, restitution, and a fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors,” the Justice Department explained.
