Michael Saylor, the Executive Chairman and co-founder of MicroStrategy, a corporate holder of Bitcoin, has reached a settlement in a landmark $40 million income tax case with the District of Columbia. This settlement marks the largest in the history of the District, as announced by the attorney general's office on Monday.

According to D.C. Attorney General Brian Schwalb, Saylor's case underscores the principle that no individual, regardless of wealth or influence, is exempt from the law. Schwalb emphasized the impact of tax evasion on the community, stating that such actions deprive the District of crucial resources for public services.

Despite agreeing to the settlement, Saylor maintains his stance and denies the allegations. He reiterated that Florida remains his primary residence and expressed his intention to resolve the matter to alleviate the burden of ongoing litigation on himself, his family, and associates.

The legal dispute dates back to August 2022 when the District of Columbia filed a lawsuit against Saylor and MicroStrategy. The lawsuit alleged that Saylor evaded over $25 million in D.C. taxes by falsely claiming residency in Florida or Virginia to benefit from lower tax rates. MicroStrategy was accused of aiding in concealing Saylor's true place of residence for tax purposes.

Saylor and MicroStrategy previously contested the claims, asserting that the case was a personal tax matter and maintaining the company's lack of involvement in Saylor's individual tax affairs.

Despite the settlement, shares in MicroStrategy surged by 4.3% to $1,590 in pre-market trading, indicating investor confidence in the company's ability to resolve legal challenges.

At the time of reporting, representatives for Michael Saylor and MicroStrategy had not responded to requests for comment from The Block.