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DC Attorney General Sues Billionaire Michael Thaler for Income Tax Avoidance

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Washington, D.C. Attorney General Carl A. Racine, a Democrat, announced Wednesday a lawsuit against billionaire Michael J. Thaler and the technology company he co-founded, MicroStrategy, saying Thaler has lived in D.C. for more than a decade and claimed to be evading $25 million in Income tax—and he conspired with MicroStrategy to help him.

Racine’s lawsuit, filed in DC Superior Court on August 22, slammed Saylor for years in a low-tax jurisdiction, even though she lives in a 7,000-square-foot penthouse on the Georgetown waterfront. He claims that he has falsely claimed to be a resident. The complaint further states that even though Thaler knew Thaler was a resident of his D.C., it “accurately reported his address to local and federal tax authorities and filed district taxes correctly.” Instead of withholding tax, they allege they conspired into the scheme. Both Saylor and MicroStrategy issued statements on Wednesday denying the allegations in the lawsuit.

After Thaler purchased the Georgetown property in 2005, Thaler purchased two adjacent penthouse units, combined them into one residence Thaler called “Trigate,” and also purchased Adams Morgan’s penthouse unit, according to the complaint. claimed to have done so. Beginning in 2012, Thaler purchased a home in Miami Beach, obtained a Florida driver’s license, and registered to vote there despite living primarily in Washington, DC, according to the lawsuit. He claims he paid no income tax in Washington, D.C. at any point between 2011 and 2021. regardless of.

“Since at least 2012, Thaler has boasted to close friends of a successful scheme to create the illusion of living in Florida to avoid district personal income taxes,” the complaint reads. , alleging MicroStrategy complicit in the fraud by agreeing to list Thaler’s residence as his home in Florida on federal tax forms. (Florida does not have a state personal income tax.) .

Thaler said in a statement that she bought her Miami Beach home 10 years ago after moving from Virginia.

“MicroStrategy is based in Virginia, but Florida is where I live, vote, and report as a juror, and is central to my personal and family life,” he wrote. We look forward to a fair resolution in court. ”

Thaler founded MicroStrategy in 1998 and was CEO of the company until earlier this month. MicroStrategy announced a change in management, he said in a news release on August 2 that Saylor would also remain chairman of the board.

MicroStrategy denied the allegations in its own statement, vowing to “aggressively defend against this overreach.”

“This case is a personal tax matter involving Mr Thaler,” the statement said. “The company was not responsible for his day-to-day operations and did not oversee his individual tax responsibilities, nor did the company conspire to meet Mr. Thaler’s personal tax obligations.”

Racine’s office said the lawsuit was filed under the city’s recently expanded False Claims Act, which the DC Council amended last year to include tax-related issues and to identify tax fraud to whistleblowers. I encourage you to Racine said the law allows courts to impose penalties of up to three times the amount of tax evasion, and that there is a gap between unpaid income taxes and other penalties his firm is seeking to recover from Saylor and MicroStrategy. And the damage in this case is over $100 million.

The lawsuit, based on a similar complaint filed against Thaler by a whistleblower in DC Superior Court last year, was unsealed Wednesday. It said it intervened in the whistleblower’s complaint and filed its own lawsuit against Saylor and MicroStrategy.

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