An ancient Bitcoin investor from Austin, Texas has been sentenced to two years in prison for underreporting his BTC gains, as per the U.S. Department of Justice (DOJ). Frank Richard Ahlgren III failed to accurately report the capital gains he earned from selling $3.7 million in Bitcoin, leading to his conviction for filing false tax returns.
Taxpayers are required to report any gains or losses from the sale of cryptocurrencies like Bitcoin, as stated by the DOJ. Acting Deputy Assistant Attorney General of the DOJ’s Tax Division, Stuart Goldberg, emphasized Ahlgren’s misconduct by saying, “Frank Ahlgren III earned millions buying and selling Bitcoins. But instead of paying the taxes he knew were due, he lied to his accountant about the extent of a large portion of his gains, and sought to conceal another chunk of his profits through sophisticated techniques designed to obscure his transactions on the Bitcoin blockchain. That conduct today earned him a two-year sentence.”
Ahlgren first bought Bitcoin in 2011 and acquired approximately 1,366 BTC from Coinbase in 2015. In October 2017, he sold about 640 BTC for a total of $3.7 million, using most of the funds to purchase a home in Park City, Utah. However, when filing his 2017 tax return, he misrepresented the purchase price of the Bitcoin to his accountant, understating his gains. He also failed to report sales of BTC in 2018 and 2019 totaling over $650,000.
Due to Ahlgren’s false filings, he was able to avoid paying over $1 million in taxes. In addition to his prison sentence, he has been ordered to serve one year of supervised release and pay $1,095,031 in restitution to the United States.
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Image Source: Midjourney