Today, an Austin resident admitted to a serious tax offense involving his bitcoin investments.
Frank Richard Ahlgren III pleaded guilty to charges related to falsely underreporting capital gains from a significant bitcoin sale.
The Details of the Case
From 2017 to 2019, Ahlgren filed tax returns that failed to accurately report or completely omitted his profits from selling around $4 million worth of bitcoin.
As per IRS regulations, all individuals must report any gains or losses from cryptocurrency transactions, including bitcoin.
Ahlgren’s Bitcoin Investments
Ahlgren was an early bitcoin investor.
Back in 2015, he bought about 1,366 bitcoins when they were valued at under $500 each.
By October 2017, he sold around 640 of these bitcoins at a price of approximately $5,807.53 each, totaling $3.7 million.
He used these proceeds to buy a home in Park City, Utah.
However, Ahlgren’s 2017 tax return significantly inflated the cost basis of the bitcoins, resulting in a major underreporting of his capital gains.
Additional Unreported Sales
Ahlgren didn’t stop there.
In 2018 and 2019, he sold more than $650,000 worth of bitcoin but failed to report these transactions on his tax returns for those years.
Overall, his actions led to a tax loss exceeding $550,000 for the IRS.
Upcoming Sentencing and Legal Proceedings
Ahlgren will be sentenced at a future date, with potential penalties including up to three years in prison, supervised release, restitution, and additional monetary fines.
The exact sentence will be determined by a federal district court judge based on the U.S. Sentencing Guidelines and other legal factors.
Ongoing Investigations and Prosecution
The Justice Department’s Tax Division, led by Acting Deputy Assistant Attorney General Stuart M. Goldberg, along with U.S. Attorney Jaime Esparza, is handling the case.
The IRS Criminal Investigation and the Texas Office of Attorney General are also involved in the investigation.
Prosecutors include Assistant Chief Michael C. Boteler, Trial Attorney Mary Frances Richardson, and Assistant U.S. Attorney William R. Harris.
It’s important to remember that an indictment is simply an accusation, and defendants are presumed innocent until proven guilty in a court of law.
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