Roger Ver, a well-known advocate for Bitcoin and other digital assets, has filed a motion with a California federal court to dismiss a case alleging that he committed tax evasion when selling millions of dollars in Bitcoin. In the filing, dated December 3rd, Ver argues that the Internal Revenue Service’s (IRS) exit tax on those who renounce their US citizenship is unconstitutional and "inscrutably vague."
The Case Against Roger Ver
On April 30th, the US Attorney’s Office in Los Angeles arrested Ver in Spain and charged him with tax evasion and fraud. The allegations state that Ver dodged more than $48 million in taxes by failing to report capital gains on the sale of "tens of thousands" of Bitcoin (BTC) for $240 million in cash.
Ver’s Defense: Unconstitutional Exit Tax
Ver’s lawyers argue that the IRS’ exit tax is unconstitutional, violating both the Apportionment Clause and the Due Process Clause of the Constitution. They claim that the charges rely on provisions of the US tax laws that are "inscrutably vague" as to their application to digital assets like Bitcoin.
The Exit Tax: A Brief Explanation
The IRS’ exit tax aims to ensure that US citizens pay all required taxes before renouncing their citizenship and withdrawing from the country’s tax system. However, Ver claims that there were several impediments to submitting an appropriate exit tax request, including a lack of liquid markets for Bitcoin at the time.
Ver’s History with Digital Assets
Roger Ver was one of the earliest advocates of Bitcoin, buying it in droves in 2011 when its price was under $1. He later emerged as a major proponent of Bitcoin Cash (BCH) after the Bitcoin network underwent a hard fork in 2017.
Previous Scandals and Convictions
Ver has been embroiled in several controversies throughout his career, including a scandal with CoinFlex in 2022, where he allegedly owed the platform $47 million in USD Coin (USDC). He was also previously convicted of selling explosives on eBay in 2002 and 2003, spending 10 months in federal prison as a result.
The Consequences of Being Found Guilty
If found guilty on all counts, Ver faces a maximum sentence of 30 years in federal prison. The case has sparked debate among the cryptocurrency community, with some calling out the US Department of Justice for targeting Ver a decade after he left the country.
Conclusion
Roger Ver’s motion to dismiss the tax evasion case is just the latest development in a long and complex saga involving one of the most well-known figures in the digital asset space. As the case continues to unfold, it remains to be seen how the court will rule on the constitutionality of the IRS’ exit tax.
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Sources
- CourtListener
- US Department of Justice