A Crypto-Tax Indictment Goes Viral

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As reported in several recent entries on this blog, IRS has been engaged in ongoing efforts to enforce the taxation of cryptocurrency transactions.. These actions have run the gamut from educating investors, miners and others on their crypto-related tax reporting responsibilities, to threatening those who may not have reported (or improperly reported) their cryptocurrency transactions activities to outright enforcement activities.. A currently developing story reports on the latest high profile target of government enforcement action, John David McAfee, the founder of the McAfee antivirus software company, a former presidential contender and the subject of several other intriguing backstories.

A recently unsealed indictment revealed that McAfee has been charged with tax evasion and willful failure to file tax returns although he had significant income from a number of sources including cryptocurrencies. The October 5, 2020 public announcement follows McAfee’s arrest in Spain where he is pending extradition to the U.S.

According to the June 15, 2020 indictment, McAfee earned millions from promoting cryptocurrencies, various consulting engagements, speaking engagements, and selling the rights to his life story for a documentary. Between 2014 and 2018, the U.S. government alleges that McAfee failed to file tax returns and report his considerable income from various sources. The indictment further alleges that McAfee failed to report his tax liability and instead directed all of his income to be paid in bank accounts and cryptocurrency exchange accounts in the names of nominees. McAfee also allegedly concealed assets, including real property, a yacht, and vehicles in the names of others.

If convicted, McAfee faces a maximum sentence of five years in prison on each count of tax evasion and a maximum sentence of one year in prison on each count of willful failure to file a tax return. McAfee may also face a period of supervised release, restitution, and monetary penalties.

(Photo Source: BBC)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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