In a historic settlement, the District of Columbia has reached a $40 million agreement with billionaire Bitcoin investor Michael Saylor and his software company, MicroStrategy. The settlement resolves allegations of tax fraud, marking the largest income tax fraud recovery in the district's history.

The case, filed by the attorney general in 2022, claimed that Saylor and MicroStrategy engaged in fraudulent tax filing practices from 2005 through 2020. The lawsuit alleged that the filings falsely stated that Saylor lived in Virginia or Florida—states with significantly lower income tax rates than Washington, D.C. Evidence supporting the district's claims included Saylor's ownership of luxury properties in Georgetown, Washington, D.C., and his social media activity.

Despite the settlement, Saylor and MicroStrategy continue to deny any wrongdoing. "Florida remains my home today, and I continue to dispute the allegation that I was ever a resident of the District of Columbia," Saylor said. The MicroStrategy founder added, "I have agreed to settle this matter to avoid the continued burdens of the litigation on friends, family, and myself."

The amended False Claims Act, revised in 2021, facilitated this lawsuit by permitting cases of tax evasion to be brought forward by whistle-blowers. The original lawsuit against Saylor was filed by a whistle-blower in 2021, leading the district to launch its own case in 2022. Under the act, a whistle-blower who files a successful claim can receive up to 25 percent of the government's recovery.

MicroStrategy's $40 million settlement serves as a landmark case in the enforcement of tax laws and the prosecution of high-profile tax evasion. While Saylor and his company maintain their innocence, the settlement highlights the importance of transparency and accountability in tax matters, particularly among prominent figures and businesses.