MicroStrategy's chair must face D.C. income-tax suit

The Superior Court of the District of Columbia rejected a motion by MicroStrategy Inc. co-founder and executive chairman Michael Saylor — probably best known as the largest corporate buyer of Bitcoin — to dismiss a lawsuit that he failed to pay income taxes despite living in the district for more than a decade.

In addition, the court dismissed a claim by Washington, D.C., against the company alleging that Saylor and MicroStrategy conspired to violate the district's False Claims Act, as well as a claim against Saylor alleging that he violated the same provision. The Feb. 28 ruling was disclosed in a Securities and Exchange Commission filing by the Tysons Corner, Virginia-based enterprise-software maker on Thursday. 

Washington sued Saylor in August for tax fraud, claiming that he skipped out on paying more than $25 million in income taxes. According to the lawsuit, Saylor knowingly avoided paying taxes he owed since 2005 by fraudulently claiming to be a resident of other, lower-tax jurisdictions, including Virginia and Florida. It claims that Saylor lived in a luxury penthouse on the Georgetown waterfront and docked multiple yachts on the district's Potomac riverfront. 

Bloomberg News

Saylor has denied the allegations, saying that he resides in Florida.

"I'm pleased the court dismissed the District of Columbia's False Claims Act claims against me and MicroStrategy," Saylor said in a statement to Bloomberg News. "I continue to respectfully disagree with the district's position on the remaining claims, and I will continue to defend against those claims. I look forward to an appropriate resolution of this case in due course."

A status conference in the case is scheduled for March 10.

— With assistance from Tom Contiliano