DC Attorney General sues Michael Saylor and MicroStrategy for tax evasion

“If you enjoy all the benefits of living in our great city while refusing to pay your fair share in taxes, we will hold you accountable,” said DC Attorney General Karl Racine.

Karl Racine, Attorney General for the District of Columbia in the United States, has announced that his office will be suing business intelligence firm MicroStrategy and its co-founder Michael Saylor for charges related to tax evasion.

In a Wednesday Twitter thread, Racine announced a lawsuit against MicroStrategy and its previous CEO Michael Saylor, claiming that he “never paid any DC income taxes” and the company “conspired” to assist him in evading paying for taxes. According to the attorney general, Saylor owes back taxes for “hundreds of millions of dollars” worth of income during his time as a DC resident.

“With this lawsuit, we’re putting residents and employers on notice that if you enjoy all the benefits of living in our great city while refusing to pay your fair share in taxes, we will hold you accountable,” said Racine.

NEW: Today, we’re suing Michael Saylor – a billionaire tech executive who has lived in the District for more than a decade but has never paid any DC income taxes – for tax fraud.

— AG Karl A. Racine (@AGKarlRacine) August 31, 2022

According to Racine, the charges stemmed from the Council of the District of Columbia amending the district’s False Claims Act to encourage whistleblowers to report residents evading tax laws. The attorney general’s office has enforcement authority under the amended legislation.

In the United States, many individuals with a high net worth are able to consult with legal experts and exploit loopholes to reduce their tax burden, leading to criticism from many lawmakers and U.S. residents. However, government officials have also incentivized many companies to set up shop in their respective jurisdictions by offering tax breaks, as was the case with Amazon’s offices.

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On Aug. 2, Saylor announced that he would step down as the CEO of MicroStrategy, a company he helped co-found in 1989, to assume the new role of “executive chair”. At the time, Saylor said splitting the roles would help the firm pursue its strategy of “acquiring and holding Bitcoin.” Former MicroStrategy president Phong Le became the firm’s CEO on Aug. 8.