Author | TaxDAO
With the rapid rise of the crypto market, regulatory risks represented by tax compliance have become increasingly prominent. In April 2024, Roger Ver, known as the "Bitcoin Jesus," was accused by the U.S. Internal Revenue Service (IRS) of suspected tax evasion of $48 million and was arrested in Spain. For months, the progress of the case has always been a concern for practitioners in the crypto asset industry, and has further attracted the crypto industry's attention to tax compliance.
As Bitcoin broke through $100,000, the "Bitcoin Jesus" case also saw new progress last week. Roger Ver's legal team filed a motion on December 4, 2024, asking the court to dismiss the IRS's tax evasion charges against Roger Ver. Currently, he is still in Spain awaiting an extradition decision from the United States. In this article, TaxDAO will review the "Bitcoin Jesus" case and provide compliance advice on related tax risks.
(Photo source: Homemade)
1. The ins and outs of the Bitcoin Jesus case
1.1 Who is Bitcoin Jesus?
Roger Ver was born in Silicon Valley, USA in 1979. He is a well-known libertarian and anarchist. In 1999, he founded Memory Dealers, a company that resells computer parts, while in college. After that, he dropped out of school and started running the company full-time. With his keen business sense, he earned his first million dollars at the age of 24.
In 2011, Roger Ver began to invest in Bitcoin and announced that his company Memory Dealers would accept Bitcoin payments, becoming the world's first company to support Bitcoin payments. Since then, Roger Ver has continued to purchase and receive large amounts of Bitcoin through his personal capacity and his companies, and has become the CEO of Bitcoin.com and the founder of the Bitcoin Foundation. He actively promoted the application and value of Bitcoin, promoted its early popularity, and accumulated great influence in the field of crypto assets, so he was dubbed "Bitcoin Jesus" by the media and the crypto community.
1.2 Why did the IRS sue Bitcoin Jesus?
In 2014, Roger Ver obtained citizenship of the Federation of St. Kitts and Nevis and renounced his U.S. citizenship shortly thereafter. According to U.S. tax law, individuals who renounce their citizenship are required to fully declare the capital gains of their global assets, including the amount and fair market value of Bitcoin held. The IRS believes that Roger Ver concealed and understated the value of his personal assets before renouncing his citizenship. After renouncing his citizenship, he obtained and sold approximately 70,000 Bitcoins from companies in the United States under his control, earning nearly $240 million in revenue, thereby evading at least $48 million in taxes payable.
In this regard, the IRS mainly made two charges: First, Roger Ver failed to comply with the exit tax regulations. When renouncing his U.S. citizenship, Roger Ver underreported the actual number of bitcoins held by him and the company he controlled, concealed the relevant transactions, and evaded this part of the tax obligation. Second, Roger Ver violated his tax obligations as a non-U.S. tax resident. After renouncing his U.S. citizenship, Roger Ver obtained and sold bitcoins from the U.S. companies he controlled in 2017, earning huge income. Although Roger Ver renounced his U.S. citizenship, because his company was located in the United States, Roger Ver transferred the bitcoins held by the company in the United States to his name without reporting such income, thus evading tax obligations.
