Many people think that if their coins are on-chain and they change citizenship, the tax authorities can’t touch them. The case of “Bitcoin Jesus” Roger Ver shows that this idea can be very costly. According to The Block, he reached an agreement with the U.S. Department of Justice last October to pay nearly $50 million in taxes, penalties, and interest on Bitcoin he failed to report when he renounced his U.S. citizenship in 2014.
【1. What exactly did he fail to report?】
Under U.S. expatriation tax rules, when someone renounces their citizenship, their worldwide assets are treated as if they were sold the day before, and capital gains tax is owed on the difference. $BTC is considered property and is subject to the same rules. According to a summary by Odaily, in February 2014 Ver and two companies he controlled held about 131,000 Bitcoin. When he filed his expatriation tax return in May 2016, he did not list all of the Bitcoin. The government estimated the tax loss at about $16.86 million. But because he admitted to acting “willfully,” the penalties exceeded $12 million; with interest, the total came to about $49.9 million.
【2. New rules expected before December】
According to Forbes, as cited by Cointelegraph, Jarod Koopman, head of the IRS Criminal Investigation division, said a revised voluntary disclosure program is expected to launch before December. The goal is to close cases within 120 days after all required documents are submitted, with penalties substantially lower than under the current rules. Specific figures have not yet been announced. Under the current approach, a 75% civil fraud penalty is charged on the year with the highest tax liability, typically covering a six-year lookback period. Section 502 of Congress’s Digital Asset Tax Clarity Act also aims to provide a way for those who underreported to correct their filings.
【3. What you can do now】
First, organize transaction hashes, dates, the dollar prices at the time, and your cost basis. Keep records of transfers between wallets too, or they could be treated as having zero cost basis. Second, staking, mining, and airdrops are generally taxed as ordinary income at their value when received, not as capital gains—don’t leave them out. Third, if you are not a U.S. tax resident, check the rules where you live.
Ultimately, the most expensive part of Ver’s case wasn’t the tax—it was the word “willful.” By a rough calculation based on the reported figures, the final bill was about three times the tax itself. The difference between coming forward voluntarily and being caught is often that extra amount.
Do you keep records of every on-chain transaction? Or have you never even thought about taxes?
See today’s other highlights in the image 👆
⚠️ Not investment advice · DYOR
#RogerVer #CryptoTaxes #UniswapAnda16zSeekIllinoisDeFiTaxExemption #CryptoMorningBrief
【1. What exactly did he fail to report?】
Under U.S. expatriation tax rules, when someone renounces their citizenship, their worldwide assets are treated as if they were sold the day before, and capital gains tax is owed on the difference. $BTC is considered property and is subject to the same rules. According to a summary by Odaily, in February 2014 Ver and two companies he controlled held about 131,000 Bitcoin. When he filed his expatriation tax return in May 2016, he did not list all of the Bitcoin. The government estimated the tax loss at about $16.86 million. But because he admitted to acting “willfully,” the penalties exceeded $12 million; with interest, the total came to about $49.9 million.
【2. New rules expected before December】
According to Forbes, as cited by Cointelegraph, Jarod Koopman, head of the IRS Criminal Investigation division, said a revised voluntary disclosure program is expected to launch before December. The goal is to close cases within 120 days after all required documents are submitted, with penalties substantially lower than under the current rules. Specific figures have not yet been announced. Under the current approach, a 75% civil fraud penalty is charged on the year with the highest tax liability, typically covering a six-year lookback period. Section 502 of Congress’s Digital Asset Tax Clarity Act also aims to provide a way for those who underreported to correct their filings.
【3. What you can do now】
First, organize transaction hashes, dates, the dollar prices at the time, and your cost basis. Keep records of transfers between wallets too, or they could be treated as having zero cost basis. Second, staking, mining, and airdrops are generally taxed as ordinary income at their value when received, not as capital gains—don’t leave them out. Third, if you are not a U.S. tax resident, check the rules where you live.
Ultimately, the most expensive part of Ver’s case wasn’t the tax—it was the word “willful.” By a rough calculation based on the reported figures, the final bill was about three times the tax itself. The difference between coming forward voluntarily and being caught is often that extra amount.
Do you keep records of every on-chain transaction? Or have you never even thought about taxes?
See today’s other highlights in the image 👆
⚠️ Not investment advice · DYOR
#RogerVer #CryptoTaxes #UniswapAnda16zSeekIllinoisDeFiTaxExemption #CryptoMorningBrief
