‘Bitcoin Jesus’ Lawyers Say His Tax Case Violates Constitution

By David Voreacos | Bloomberg

Lawyers for Roger Ver, the cryptocurrency advocate known as Bitcoin Jesus, urged a US judge to dismiss his tax evasion indictment in their first court filing since his April arrest in Spain.

US prosecutors charged Ver, 45, with evading more than $48 million in taxes for selling $240 million in tokens and with filing a false “exit tax” return after he renounced his US citizenship in 2014. The legal salvo came as Ver awaits a Spanish judge’s decision on whether he must be extradited to face the most prominent US tax case dealing only with crypto assets.

Ver’s lawyers argued Tuesday in Los Angeles federal court that the exit tax, applied by the Internal Revenue Service to US citizens who expatriate with more than $2 million in assets, is unconstitutional and “impermissibly vague.” They said prosecutors improperly interrogated a Ver lawyer and ignored documents showing he had no intent to break the law.

The exit tax improperly demands “millions of dollars from expatriates in taxation that would not apply to anyone else,” Ver’s lawyers wrote.

As he planned to expatriate, prosecutors allege, Ver hid the number and value of Bitcoin he owned and controlled personally and through his California-based companies, MemoryDealers and Agilestar. Ver worked with a law firm and appraisers on the exit tax, but gave them false information about his Bitcoin, and an exit tax return filed in 2016 failed to report the Bitcoin he owned personally while underreporting the value of his companies, prosecutors charge.

But Ver’s lawyers argued that prosecutors ignored evidence showing he had no intent to violate US tax law.

“I want to make sure that my exit tax payments are as clean as possible, with no room to have trouble from the IRS in the future,” Ver wrote in a 2013 email, according to the filing.

The indictment also alleges Ver “fraudulently misrepresented and concealed” from the IRS the crypto that his companies sold in 2017 for about $240 million. But the filing claims Ver and his prior lawyers tried to figure out what he owed the US amid unclear guidance on how the tax laws applied to crypto.

“Although Ver had long engaged the government in discussions regarding a civil resolution of this matter, the government has never been able to articulate the taxes purportedly owed,” they wrote. “Instead of continuing those discussions in good faith, but while Ver’s prior counsel remained under the impression that discussions were ongoing,” the US announced his indictment.

Ver’s lawyers also argued that IRS agents violated his attorney-client privilege in December 2017 by conducting an unannounced interview of one of his tax lawyers. In 2022, the US Supreme Court took up a case on the issue that didn’t name the parties but matched Ver’s circumstances. The court dropped that case in 2023 without issuing a ruling.