Avoid Tax Evasion: Bitcoin Trader Sentenced to 2 Years
An investor in bitcoin who tried to hide $1 million in cryptocurrency gains on his tax returns has been sentenced to two years in prison. Despite using sophisticated tactics such as mixers and multiple wallets, the feds were able to trace his crypto trades. Frank Richard Ahlgren III, from Austin, Texas, started buying bitcoins in 2011 and increased his trading in 2015, purchasing around 1,366 using Coinbase accounts. He cashed in on his earnings in 2017, making $3.7 million after selling about 640 bitcoins.
Seeking to hide his earnings, Ahlgren lied on his tax return by submitting a false summary of his gains and losses from the sale of bitcoins. This tax evasion case, focused solely on cryptocurrency, marks the first of its kind in the US. In 2018 and 2019, Ahlgren sold more bitcoins, earning over $650,000, which he did not report on his tax returns. He took steps to conceal his transactions on the bitcoin blockchain, including using mixers and meeting someone in person to exchange bitcoins for cash.
Lucy Tan, the acting special agent in charge of IRS-Criminal Investigation, stated that Ahlgren’s attempts to conceal $1 million in cryptocurrency gains were ultimately unsuccessful. With the IRS cracking down on tax evasion in the cryptocurrency industry, Operation Hidden Treasure is focused on training employees to find taxpayers who omit digital assets from their tax returns. Tan emphasized that as cryptocurrency prices rise, the temptation to evade taxes also increases. Ahlgren’s case serves as a warning that no one is above the law when it comes to tax evasion.
