'Bitcoin Jesus' Renounced US Citizenship to Avoid Taxes, Facing Nearly $50 Million Expatriation Tax a Decade Later

BlockBeats news, October 18 - Earlier this month, the U.S. Department of Justice announced a deferred prosecution agreement with "Bitcoin Jesus" Roger Ver, under which his fraud and tax evasion charges will be dropped in exchange for paying a maximum penalty of $49.9 million.

As one of the earliest Bitcoin evangelists, Roger Ver bought a large amount of Bitcoin in 2011 at a cost of less than $3 million. In February 2014, to avoid high tax burdens, he acquired citizenship of the Caribbean island nation of St. Kitts and Nevis and renounced his U.S. citizenship the following month. At that time, he and his company held at least 131,000 Bitcoins, worth over $70 million at the then-current price. He thought that by changing citizenship, the high U.S. tax burden would be a thing of the past.

However, the strict U.S. "expatriation tax" completely thwarted his plans. According to U.S. tax law, qualifying expatriates must treat their global assets as "sold the day before expatriation" and pay capital gains tax. Although Ver declared and paid $1.03 million in taxes, he not only failed to declare his personally held Bitcoins but also severely undervalued his company's assets. Ten years later, the IRS verified his fraudulent tax evasion (fraudulent tax evasion is not subject to the statute of limitations), ultimately forcing him to pay up to $49.9 million in taxes, penalties, and interest—48 times the amount he self-reported and paid that year.