Washington, DC Suing MicroStrategy Co-Founder for Tax Evasion

Washington, D.C. is suing technology executive Michael J. Saylor and data tracking company MicroStrategy — which Saylor co-founded — alleging that Saylor evaded D.C. income taxes while living in the district and that the company conspired to help him do so.

The Office of the Attorney General (OAG) alleges that Saylor pretended to be a resident of other jurisdictions and that MicroStrategy did not accurately report his address to tax authorities or withhold and remit D.C. taxes, despite having information that Saylor was a resident of the district, according to a Wednesday (Aug. 31) press release. It alleges that Saylor did so for 15 years and evaded $25 million in taxes.

“D.C. residents and their employers are now on notice that attempts to evade the District’s income tax laws by falsely claiming that they reside in another jurisdiction will be investigated and, if substantiated, held accountable,” District of Columbia Attorney General Karl A. Racine said in the release.

PYMNTS has requested comment from MicroStrategy.

This is the first lawsuit brought under the district’s new law that encourages whistleblowers to report cases like these, enables the district to bring suit against those who are accused and allows the whistleblower to collect a percentage of any monetary recovery the district obtains, according to the press release.

Saylor served as CEO and chairman of the board of MicroStrategy from the time he founded the company until Aug. 8, when he assumed the new role of executive chairman and a new CEO was named, with Saylor also remaining chairman of the board and an executive officer, according to an Aug. 2 press release from the company.

As PYMNTS reported Aug. 5, MicroStrategy’s crypto asset allocation and massive exposure resulted in a nearly $1 billion impairment in the second quarter—equal to nearly 10 times the company’s second-quarter sales.

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