Washington DC Attorney General Karl A. Racine has indicted Michael Saylor and MicroStrategy for tax fraud.
NEW: Today, we’re suing Michael Saylor – a billionaire tech executive who has lived in the District for more than a decade but has never paid any DC income taxes – for tax fraud.
— Archive: AG Karl A. Racine (@AGKarlRacine) August 31, 2022
He announced this himself on his official Twitter profile, stating that Saylor has lived in the District of Columbia for more than a decade, but has never paid any income tax in Washington.
Michael Saylor charged with tax fraud. MicroStrategy company also implicated.
Before examining the initiative in detail, however, it is necessary to point out that elections will be held in November to elect the new Attorney General of Washington, D.C., since the office is an elective one, and even though Racine is not running for reelection it comes to mind that this initiative may be part of the election propaganda campaign since he gave the news on his personal Twitter profile.
Racine stated that MicroStrategy has also been denounced:
“For conspiring to help him evade taxes he legally owes on hundreds of millions of dollars he’s earned while living in DC.”
The prosecutor, therefore, alleges that Saylor, over the years, earned hundreds of millions of dollars on which he never paid any taxes.
This is the first lawsuit filed under the District of Columbia’s recently amended False Claims Act. The new False Claims Act, in fact, encourages whistleblowers to report residents who evade tax laws by lying about their true residence.
Racine also reveals that they are warning Washington DC residents and employers, who enjoy all the benefits of living in the capital city, that if they refuse to pay their “fair share in taxes” they will be held accountable.
How MicroStrategy is involved
As the Financial Times reveals, the complaint against Saylor alleges that MicroStrategy was aware that its former CEO lived in Washington for more than half the year because it had access to information about his whereabouts. Instead, he reported to the Internal Revenue Service (IRS) for the years 2014 to 2021 that his residential address was his home in Florida.
The charge, therefore, is that he erroneously paid taxes in Florida instead of Washington, DC.
Saylor has stated that he disagrees with these charges because he claims to live in Florida, while the company has stated that the case is a personal matter that concerns only Saylor.
It is not, however, clear exactly how much, if any, Saylor would have “saved” by paying taxes in Florida instead of Washington DC. However, since the law requires that those who live in the capital for at least 183 days a year must pay taxes there, should it be proven that Saylor lived in the capital for at least half the year, Attorney Racine may be right.
It is also not clear exactly what Saylor and MicroStrategy may risk if they are found guilty.
It should be added that a month ago Saylor resigned as CEO of MicroStrategy.