On December 12, 2024, the U.S. Department of Justice (“DOJ”) announced that Frank Richard Ahlgren III was sentenced to two years in prison for filing a false tax return underreporting gains from selling $3.7 million in Bitcoin. As we discussed here and here, USA v. Ahlgren marked the first crypto case involving tax evasion allegations unrelated to other crimes. In addition to his prison sentence, Ahlgren was ordered to serve one year of supervised release and pay $1,095,031 in restitution to the United States. Further, a restraining order (requesting motion here) requires him to surrender devices and passcodes used for storing and accessing his crypto, disclose all of his crypto accounts and comply with restrictions on transferring his crypto.
In connection with the case, Acting Special Agent in Charge Lucy Tan of IRS Criminal Investigation's Houston Field Office stated, “[a]s the prices for cryptocurrency are high, so is the temptation to not pay taxes on its sale. Avoid the temptation and avoid federal prison.” Ahlgren demonstrates the DOJ's ongoing commitment to prosecuting crypto tax evasion and serves as a stark reminder for taxpayers to reassess their reporting and filing obligations to ensure compliance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
