Early Bitcoin Investor Pleads Guilty to Filing Tax Return that Falsely Reported His Cryptocurrency Gains

On April 23, 2024 we posted 1st Tax Crypto Indictment is Proof That IRS is Coming After Undisclosed Crypto Income! where we discussed that Federal prosecutors' first public indictment of an individual who underreported the capital gains from a nearly $4 million legal sale of bitcoin indicates that authorities have opened the floodgates for more criminal cases that deal purely with undisclosed gains on legitimate cryptocurrency transactions and the criminal allegations against Frank Ahlgren III that federal prosecutors brought in a Texas federal court are novel in that unlike in previous cryptocurrency cases, the tax evasion allegations in Ahlgren's case did not stem from criminal activities such as money laundering, theft, human trafficking, illicit drugs, online black marketplaces, terrorism or defrauding investors.

Now According To DoJ, Frank Ahlgren III Has Pleaded
Guilty On  September 12, 2024 To Filing A Tax Return
That Falsely Underreported The Capital Gains He
Earned From Selling $3.7 Million In Bitcoin.

According to court documents and statements made in court, between 2017 and 2019, Frank Richard Ahlgren III filed false tax returns that underreported or did not report the sale of $4 million worth of bitcoin in which he had substantial gains. All taxpayers are required to report any sale proceeds and gains or losses from the sale of cryptocurrency, such as bitcoin, on their IRS tax return. 

Ahlgren was an early investor in bitcoins. 

• In 2015, Ahlgren purchased approximately 1,366 bitcoins. That year, bitcoins were valued at no more than $500 each. 
• In October 2017, Ahlgren sold approximately 640 bitcoins for approximately $5,807.53 per bitcoin for a total of $3.7 million. 
• Ahlgren had purchased most of the bitcoins he sold in 2017 in 2015. 

He used the entirety of the proceeds from the sale of bitcoins to purchase a house in Park City, Utah. Ahlgren then filed a false tax return with the IRS for 2017 that substantially inflated the cost basis of the bitcoins, and therefore underreported his capital gain from his bitcoin sale.

• In addition, in 2018 and 2019, Ahlgren sold more than $650,000 worth of bitcoins and did not report those sales on either years’ tax returns. 

In total, Ahlgren caused a tax loss to the IRS of more than $550,000.

He Faces A Maximum Penalty Of Three (3) Years
In Prison As Well As A Period Of Supervised Release,
Restitution And Monetary Penalties.

Ahlgren will be sentenced at a later date. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Have an Unreported Crypto Currency?

 Like Your Freedom? 

  Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)