Roger Ver, a well-known advocate for Bitcoin and digital assets, has filed a motion in a California federal court seeking to dismiss a case alleging tax evasion and fraud. According to the filing, Ver argues that the Internal Revenue Service’s (IRS) exit tax is unconstitutional and "inscrutably vague." This article will delve into the details of the case, the arguments presented by Ver’s lawyers, and the implications of this legal battle for the cryptocurrency community.
Background: The IRS Exit Tax
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. When a US citizen with more than $2 million in assets renounces their citizenship, they are subject to an exit tax on any unrealized gains on their investments. The tax is designed to prevent wealthy individuals from avoiding taxes by leaving the country.
The Case Against Roger Ver
In April 2023, the US Attorney’s Office in Los Angeles arrested Roger Ver in Spain and charged him with tax evasion and fraud. The indictment alleges that Ver dodged more than $48 million in taxes by failing to report capital gains on the sale of tens of thousands of Bitcoin for $240 million in cash. According to the government, Ver filed a fraudulent and false exit tax after renouncing his US citizenship for a Japanese one in 2014.
Ver’s Response: The Case is Unconstitutional
Roger Ver has responded to the charges by arguing that the case against him is unconstitutional. In a filing submitted to the California federal court on December 3, 2023, Ver’s lawyers claimed that the IRS exit tax violates both the Apportionment Clause and the Due Process Clause of the Constitution. They also argued that the charges rely on provisions of the U.S. tax laws that were "inscrutably vague" as to their application to digital assets.
The Implications of the Case
The implications of this case extend far beyond Roger Ver’s personal situation. If the IRS exit tax is deemed unconstitutional, it could have significant consequences for the cryptocurrency community. The tax was designed to prevent wealthy individuals from avoiding taxes by leaving the country, but its application to digital assets has been widely criticized as unclear and burdensome.
Ver’s Claim of Unlawful Interrogation
Roger Ver also claimed that prosecutors had "unlawfully" interrogated one of his lawyers. According to Ver, this interrogation was part of a broader pattern of misconduct by the government, including ignoring crucial documents that showed he had no intent to file a fraudulent tax return.
Ver’s History with Bitcoin and Digital Assets
Roger Ver has been an outspoken advocate for Bitcoin and digital assets since their early days. He was one of the earliest adopters of Bitcoin, buying it in droves in 2011 when it was under $1. He later emerged as a major proponent of Bitcoin Cash (BCH) after the Bitcoin network underwent a hard fork in 2017.
Conclusion
The case against Roger Ver raises important questions about the constitutionality of the IRS exit tax and its application to digital assets. The implications of this case extend far beyond Ver’s personal situation, with significant consequences for the cryptocurrency community as a whole. As the legal battle unfolds, it will be essential to monitor developments closely and consider the potential impact on the industry.
A Brief Timeline of Roger Ver’s Involvement in Bitcoin and Digital Assets
- 2011: Ver buys large quantities of Bitcoin when its value is under $1
- 2017: Ver emerges as a major proponent of Bitcoin Cash (BCH) after the Bitcoin network undergoes a hard fork
- 2022: Ver becomes embroiled in a scandal with CoinFlex, which claims that he owes the platform $47 million in USD Coin (USDC)
- April 2023: Ver is arrested in Spain and charged with tax evasion and fraud