A Texas resident, Frank Richard Ahlgren III, received a two-year prison sentence for filing false tax returns.
The tax filings misrepresented the capital gains he earned from selling $3.7 million in Bitcoin.
A Case Falsifying Crypto Profits
Court records revealed that Ahlgren, an early Bitcoin investor, filed fraudulent tax returns between 2017 and 2019. These filings underreported or entirely omitted proceeds from the sale of $4 million worth of Bitcoin.
In the US, Federal crypto taxation law requires taxpayers to disclose all cryptocurrency sales, including gains or losses, on their annual returns.
“This sentencing marks the first criminal tax evasion prosecution in the US centered solely on cryptocurrency. This case highlights the IRS’s capability to track and prosecute tax evasion involving cryptocurrencies,” popular influencer Wadi wrote on X (formerly Twitter).
According to the reports, Ahlgren began investing in Bitcoin as early as 2011. By 2015, he had acquired approximately 1,366 BTC through Coinbase. The highest market price of BTC that year reached around $495 per BTC.
In October 2017, he sold 640 Bitcoin for $3.7 million at an average price of $5,808 per token. He used these proceeds to purchase a home in Utah.
However, Ahlgren provided false information to mislead his accountant while preparing his 2017 tax return. He inflated the purchase prices of his Bitcoins to claim minimal gains. His fabricated figures even exceeded the market price of Bitcoin at the time.
In subsequent years, Ahlgren sold additional Bitcoin worth over $650,000 without reporting these transactions on his 2018 and 2019 tax returns.
To conceal his activity, he moved funds through multiple digital wallets, conducted in-person cash exchanges, and used crypto mixers to obscure transaction details on the blockchain.
Crypto Taxation Remains A Growing Concern
Ahlgren’s case reflects the heightened scrutiny surrounding crypto taxation in the US. High-profile figures like Roger Ver, known as “Bitcoin Jesus,” are also facing serious tax-related charges.
The Federal government accuses Ver of evading $48 million in taxes tied to the sale of $240 million worth of cryptocurrencies and a tax obligation linked to his renunciation of US citizenship in 2014. US prosecutors are seeking Ver’s extradition, which is currently awaiting a court decision in Spain.
While the US tightens its grip on cryptocurrency taxation, other countries are easing restrictions. The Czech Republic recently announced plans to eliminate capital gains taxes on crypto, which had been held for over three years. Transactions below $4,200 annually will no longer require reporting.
In Russia, cryptocurrency is now classified as property under updated tax legislation. Crypto transactions are exempt from value-added tax (VAT), and earnings will be taxed alongside securities income. Personal income tax on crypto-related earnings is capped at 15%.
These developments highlight contrasting approaches to crypto taxation worldwide as nations balance regulatory oversight with fostering innovation in the blockchain economy.
The post Texas Resident Sentenced to Two Years for Bitcoin Tax Fraud appeared first on BeInCrypto.
