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‘Bitcoin Jesus’ fights IRS tax evasion case from Spanish island

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To his followers, Roger Ver is known as Bitcoin Jesus, a charismatic advocate of the cryptocurrency that is once again captivating investors with record-breaking gains. But to the Internal Revenue Service, Ver symbolizes a new target in the digital age: a crypto holder suspected of failing to pay taxes after selling tokens.

U.S. prosecutors charged Ver this year with evading more than $48 million in taxes for selling $240 million in tokens. It’s the most prominent case dealing solely with tax fraud and digital-asset sales, and marks a break from the tradition of prosecutors tacking tax charges onto crypto cases for crimes like money laundering, ransomware attacks and investor scams.

Ver, 45, is awaiting a Spanish judge’s decision on whether he must be extradited to America after his April arrest in Barcelona while attending a crypto conference. The U.S. expatriate spent a month in jail before getting out on bail and moving to Mallorca, where he’s received a steady stream of visitors. An outspoken critic of the U.S. government, he said he’s being persecuted by prosecutors.

Roger Ver speaking at a Coingeek conference
Roger Ver, a U.S. expatriate, awaits a Spanish judge’s decision over whether he will be extradited to America to face tax fraud charges.

Anthony Kwan/Photographer: Anthony Kwan/Bloom

“They don’t like me, and they don’t like my political views, and they just came at me every which way,” Ver told Bloomberg News in an exclusive interview in late October. 

Ver, a U.S. expatriate, awaits a Spanish judge’s decision over whether he will be extradited to America to face tax fraud charges.

Ver said the Justice Department has ignored evidence that helps his defense and refutes a central premise by prosecutors — that he intended to cheat the IRS. Rather, he said, he relied on professionals who advised him when IRS policy on taxing crypto sales was unsettled.

“I instructed all my tax attorneys and preparers, ‘We need to do everything perfectly because I don’t want any problem with the IRS at all,”‘ Ver said. “That was their instructions the whole time.”

A Justice Department representative declined to comment.

The seeds of Ver’s legal peril lay in his success as an early crypto investor — long before the latest Bitcoin rally fueled by Donald Trump’s U.S. presidential win. They center on his representations to the IRS and the agency’s reconstruction of his holdings.

Ver grew up in Silicon Valley, founding a computer company called MemoryDealers at the precocious age of 19. He also engaged in tax protests and ran for California’s legislature at 21 as a libertarian.

In 2001, he pleaded guilty to dealing explosives without a license. (Ver says he simply sold firecrackers on eBay.) He served 10 months in prison, which hardened his attitude toward the U.S. government. He left America in 2006, moving to Japan. He focused on building MemoryDealers and another firm, Agilestar, which sold optical transceivers.

Spreading the gospel

When crypto began, he embraced its promise for transferring wealth without government interference. He started buying Bitcoin in 2011 for less than $1, touting it at barbecues, parties and everywhere else. Intense and fast talking, he spread the vision of using crypto to buy a sandwich or even a car. When Bitcoin hit it big, Ver touted its potential from conference stages.  

He co-founded Blockchain.com, a crypto company once valued at $14 billion, and was an early investor in payment processor BitPay and digital-asset firm Ripple. When the Bitcoin network underwent a software upgrade he opposed in 2017, Ver broke with the community, switching to a split-off called Bitcoin Cash. He said his current holdings include Bitcoin, Bitcoin Cash, Ether and Zeno.

Despite his notoriety, Ver decided in 2014 to renounce his U.S. citizenship, later becoming a citizen of St. Kitts and Nevis. U.S. citizens who expatriate and are worth more than $2 million must report their worldwide assets to the IRS, and pay an exit tax based on their asset sales.

As he planned to expatriate, prosecutors allege, Ver hid the number and value of Bitcoin he owned and controlled personally and through MemoryDealers and Agilestar, his California-based companies.

The IRS used blockchain analysis to determine that by early 2014, Ver and his companies owned about 131,000 Bitcoin trading between $782 and $960, according to the indictment — more than he reported in tax filings. He’s accused of tax evasion, wire fraud, and filing a false tax return.

Ver worked with a law firm and appraisers on the exit tax, but gave them false or misleading information about his Bitcoin holdings, and an exit tax return filed in 2016 failed to report the Bitcoin he owned personally and underreported the value of his companies, prosecutors charge.

The indictment also alleges Ver “fraudulently misrepresented and concealed” from the IRS the crypto that his companies sold in 2017 for about $240 million. 

Ver disputes this characterization, but declined to discuss the indictment further or elaborate on his crypto holdings with Bloomberg.

A website, freerogernow.org, is linked to Ver’s personal website and encourages supporters to sign an open letter calling on the U.S. government to end his “unjust prosecution.” It adds some details about his investigation, including claims that IRS agents interrogated his tax lawyer in 2018 without a warrant and that litigation ensued about communications with his lawyers. 

In 2022, the U.S. Supreme Court took up a case that didn’t name the parties but matched Ver’s circumstances. The court dropped that case in 2023 without issuing a ruling. 

If he’s extradited, Ver’s case would be the first to go to trial on crypto-only tax charges. In February, a Texas man, Frank Ahlgren, was accused of underreporting capital gains from selling $3.7 million in Bitcoin. Ahlgren pleaded guilty in September.

Ver, who has more than 700,000 followers on X, spent years under IRS investigation as he traveled the world. In 2021, he posted a satirical video titled “Taxation is Theft.” 

Ver was indicted Feb. 15 under court seal but didn’t learn about it until weeks later, when he was at the Privacy Guardians conference in Barcelona. His book, Hijacking Bitcoin: The Hidden History of BTC, had just gone on sale. A police officer approached him in the lobby of the W Hotel, asked him to confirm his identity, and said he had an Interpol arrest warrant for him.

“The bottom kind of fell out of my stomach and I was like, ‘Oh, my God, the U.S. is going to do this to me again,”‘ Ver said.

Back to jail

With his arrest, Ver returned to prison, this time to a two-man cell in Spain. Some inmates incorrectly assumed he was an American spy or undercover cop, he said.

“I didn’t tell anybody in there who I was because I didn’t want to get extorted or have any sort of problems with anybody,” Ver said.

Spain has been a close ally of the U.S. in extradition cases. This year, Spain sent Douglas Edelman, a former defense contractor, to face U.S. charges that he evaded taxes on more than $350 million in income. He’s pleaded not guilty and denies the charges.

Ver said he’s spending his days in Mallorca talking to his lawyers on Zoom, practicing Brazilian jiujitsu and entertaining friends visiting from overseas. He’s attended Bitcoin meetups, where he said he was well received.

Ver appeared in an HBO documentary about the origins of Bitcoin. A sparring partner from jiujitsu said he’s seen him in the show.

“I said, ‘Please, if you don’t mind, don’t mention that to anybody else.’ He said, ‘Sure, no problem.’ But he had kind of a sly grin when he said that to me.”

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Accounting

How the racial will gap affects wealth

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Reducing the disparity in will-writing between Black and white households would shrink the racial wealth gap in America, according to a new study.

Eliminating the so-called will gap would cut the stubbornly wide difference in wealth among the two races by “a modest but meaningful” 10% over three generations, according to a working academic paper and research brief released earlier this month by the Center for Retirement Research at Boston College. The paper hasn’t received peer review or approval for publication in an academic journal. The key findings of the research, which was financially supported by Wells Fargo, show the importance of financial advisors’ will and estate-planning services.

“It’s a pretty easy thing to do to write a will — relative to, say, saving a lot more money,” said Gal Wettstein, a senior research economist with the center and one of four co-authors of the report, alongside Jean-Pierre Aubry, Alicia Munnell and Oliver Shih. “We think that it’s a pretty low-hanging fruit in terms of making progress.”

Their conclusions followed another report by the center last year concluding Black and Hispanic Americans “are less likely to get an inheritance, have a will, and plan to leave a bequest” and other research at the intersection of race and wealth. For example, racial differences in retirement savings, homeownership subsidies and tax advantages remain persistent factors.

READ MORE: Starting estate planning conversations — even without tax expertise 

Despite a significant narrowing of the ratio of wealth between white and Black households between 1880 and 1950, it has stayed around 6-to-1 in recent decades amid “evidence that it has been growing wider since the 1980s,” according to the study. Wiping out the wealth gap would take more than three centuries at the current pace, the McKinsey Institute for Black Economic Mobility found in another study earlier this year.

The center’s number-crunching, using data from the University of Michigan Health and Retirement Study, offers another lens of examining that gap. “Even after adjusting for characteristics such as wealth, education, presence of living children, and having received an inheritance in the past,” Black households are 20 percentage points less likely than whites to have a valid will, the study said.

That reflects a juxtaposition in which “many African American households are gaining in income and are very quickly moving into the middle class, upper middle class” yet feel a sense of “intimidation to step into an office, an investment firm’s office, and engage in a conversation of, ‘Hey, I’d like to start investing,'” Association of African American Financial Advisors Chair Alex David, who’s also the division director of the northeast for Raymond James Financial Services, said in an interview last week. The lack of wills stems from “a culmination of a number of socioeconomic factors that go into starting a conversation,” he said.

“Oftentimes they feel comfortable having a conversation with someone that might have experienced the same thing that they have,” David said. “‘I finally am at a place in my life where I can start saving and investing. I want to learn more. I’d like to start investing. Oh, you’re the same way, you’re first generation. Wow, I don’t feel as intimidated. So starting with $25,000, that’s all right.’ Being able to have a comfortable conversation with like-minded and perhaps like-history individuals oftentimes needs to take place.”

Without those conversations, the heirs to a deceased relative who’s bequeathing an asset, such as a home, without a valid will miss out on benefits such as property tax deferrals, an easier sales or insurance process and the ability to “to pass along their assets in a way that preserves their value,” Wettstein said. For most Americans of any background, their home is likely to be their most valuable asset, he noted. 

“Having a will can increase the economic value of the bequest,” he said. “Without a will, houses are passed along to heirs according to whatever the state default rules are, and those generally divide the asset between the heirs.”

READ MORE: What advisors (and their clients) can learn from celebrity estate debacles

To calculate the potential impact of writing a will, Wettstein and the other researchers performed two different simulations “to account for the shortcomings of each of these two ways” of measuring the effect of will-writing “on bequests and of bequests on late life wealth,” he said. Each of the two simulations of a scenario in which Black households had a will at the same rate as those of white ones since 1980 resulted in a 10% reduction in the racial wealth gap. 

“The racial wealth gap has proven to be a persistent problem, and one reason may be that Black decedents have a much lower likelihood of having a will,” the study said. “The robust finding is that such a change would have modestly but meaningfully reduced the wealth gap — by about 10 percent — by the time today’s prime-age workers reach their peak wealth years (ages 60-70) in 2040. While no one change is likely to completely close the racial wealth gap, interventions that increase the will-writing of Black households are one promising avenue for policy exploration.”

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Private equity isn’t a silver bullet for accounting firms

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While the influx of private equity into the accounting profession has brought much-needed capital and a welcome alternative to firms, it’s definitely not for everyone, say experts.

In fact, the overwhelming majority of accounting firms won’t ever make a PE deal, Allan Koltin of the Koltin Consulting Group told attendees of Accounting Today’s inaugural PE Summit, held this week in Chicago.

“Private equity is not a silver bullet,” he said in his keynote address. “If you don’t do PE, that doesn’t mean you won’t be successful. But you do need to figure out what you’re going to do” to solve the issues of access to capital and resources that PE deals help with.

Allan Koltin at the 2024 Accounting Today PE Summit

Allan Koltin at the 2024 PE Summit

It’s important that firms can be successful without private equity — because many of them won’t be able to access it.

“Half the firms that want to go with PE can’t,” said Koltin, who is a co-chair of the PE Summit. “If you’re in the bottom half of earnings in accounting, you won’t be a good fit. I get calls from PE firms that want to pull out from a deal because they’ve looked at the firm’s numbers and don’t want to make an offer. ‘We don’t want to insult them.'”

Koltin and a number of other experts at the conference described the “quality of earnings” review that PE firms do as strenuous examination that often happens later in the process than accountants might expect that kind of due diligence to occur — and that can kill a deal.

“It seems like a lot of deals have happened, but believe me, the same number or more have died,” Koltin explained.

What’s more, while most of the earliest deals in the profession seem to have turned out well, that’s no guarantee that will be the case going forward.

“If you hear nothing from me, this is what you need to know: Not every PE deal will be successful,” Koltin warned. “There will be some home runs, and some good ones, and some that just don’t work.”

“There are going to be winners and losers,” agreed Phil Whitman, a co-chair of the event and CEO of Whitman Transition Advisors, in a panel session on the first day of the conference. “I bet there will be more winners than losers, but there are going to be losers, so you have to do due diligence, on both sides of the deal.”

So far, the PE deals are so good

Experts at the PE Summit were quick to point out that none of this should suggest that private equity has not been a net positive for the profession.

“Private equity brought to the landscape a new awareness of the issues that accounting firms are facing, and a sense of urgency started kicking into place,” said Bob Lewis, the third co-chair of the event and president of The Visionary Group.

Added Whitman, “Private equity is the white knight that came riding in to save day. They’ve got a better answer related to talent acquisition; they’ve got a better answer to firms’ succession challenges. We haven’t been able to solve those on our own.”

“PE firms raised the bar on our profession,” according to Koltin. “They’re making it more competitive. They’re making tougher decisions faster. They’re taking the partnership model and making it work better.”

The initial wave of accounting firms to make PE deals, almost by definition, have been those that were a great fit for that type of investment.

“Every single one of the deals that has been done seems to be working,” said Koltin. “If you open up the playbook of EisnerAmper and Citrin Cooperman — it’s been magical. They’ve hit it out of the park.”

That success comes down to matching up the right players on either side of the deal.
“It starts with a great accounting firm — strong leadership, strong organic growth, lots of next-gen talent,” explained Koltin. “And what would I look for in a PE firm? A PE firm that understands the people business. … I want a resource enabler — ‘You were successful before you met us. … We don’t want to get in your way.'”

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PCAOB adopts far-reaching firm and engagement metrics and firm reporting standards

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The Public Company Accounting Oversight Board voted Thursday to adopt new requirements for auditing firms to report on various metrics for both the firm and its engagements, as well as change the annual reports the firms submit to the PCAOB.

The changes involve two standards, on firm and engagement metrics, and firm reporting. The PCAOB proposed the far-reaching standards in April, and they provoked some pushback from commenters, especially on engagement metrics. The firm and engagement metrics project stemmed from a yearslong effort at the PCAOB to develop a set of audit quality indicators. In response to some of the negative comments, the PCAOB decided to scale back the original proposal, although one member of board still voted against it.

Under the new rules, PCAOB-registered public accounting firms that audit one or more issuers that qualify as an accelerated filer or large accelerated filer will be required to publicly report specified metrics relating to such audits and their audit practices. These metrics — which will further PCAOB oversight activities and which can be used by investors, audit committees, and other stakeholders — cover the following eight areas:

  • Partner and manager involvement;
  • Workload;
  • Training hours for audit personnel;
  • Experience of audit personnel;
  • Industry experience;
  • Retention of audit personnel (firm-level only);
  • Allocation of audit hours; and,
  • Restatement history (firm-level only).

“The goal of this project before us today is to provide additional information about audit firms and their audits in both a consistent and comparable manner to bolster confidence, strengthen oversight, and empower investors and audit committees to make better informed decisions and help drive audit quality forward,” said PCAOB chair Erica Williams in a statement at an open meeting Thursday. “Today, investors and other stakeholders lack information about audit firms’ practices and their engagements — some of which may be shared with company management or their audit committees. Through this project, investors, audit committees and other stakeholders will have access to the same valuable information on firms and their engagements to help them make knowledgeable decisions regarding audit firms and investment related choices.”

PCAOB logo - office - NEW 2022

Reporting of firm-level metrics will be required annually on a new Form FM, for firms that serve as the lead auditor for at least one accelerated filer or large accelerated filer. Reporting of engagement-level metrics for audits of accelerated filers and large accelerated filers will be required via a revised Form AP, which will be renamed “Audit Participants and Metrics.” Finally, limited narrative disclosures will be allowed (but not required) on both Form FM and Form AP to provide context and explanation for the required metrics.

After issuing its proposal in April on firm and engagement metrics, the PCAOB received feedback from a wide array of commenters and made some changes to the amendments as originally proposed

  • Reduced the metric areas to eight (from 11);
  • Refined the metrics to simplify and clarify the calculations;
  • Increased the ability to provide optional narrative disclosure (from 500 to 1,000 characters); and,
  • Updated the effective date. (If approved by the SEC, the earliest effective date of the firm-level metrics will be Oct. 1, 2027, with the first reporting as of September 30, 2028, and engagement-level metrics for the audits of companies with fiscal years beginning on or after Oct. 1, 2027.)

For the new requirements, the PCAOB also established a phased-in implementation to provide smaller firms with more time. The requirements will take effect for firms that audit more than 100 issuers first, and for other firms, the requirements will take effect the following year.

However, PCAOB board member Christina Ho, believes the new requirements were drawn up too hastily. “Our votes today are unprecedented,” she said in a statement at the meeting Thursday. “Never in the history of the PCAOB has the Board rushed to adopt new standards and rules in the middle of a historic transition to new SEC leadership, let alone adopt standards and rules that are not ready. The Firm and Engagement Metrics was proposed on April 9, 2024, and we received 46 comment letters. If adopted today, it will set the record for this Board as the fastest adopted standard which only took 226 days (7.5 months). The average number of days from proposal to adoption for the five standards adopted by this Board to date was 448 days (15 months), with an average of 32 comment letters. Essentially, although the Firm and Engagement Metrics proposal has over 40% more comment letters than the average of 32, it took half as much time as the other standards adopted by this Board. Political expediency is not evidence-based policymaking. Haste naturally harms work product quality, which will not escape any keen eyes.”

Firm reporting standard

For the firm reporting standard, the amendments adopted by the PCAOB on Thursday will modernize its annual and special reporting requirements to facilitate the disclosure of more complete, standardized and timely information by registered public accounting firms. Much of the information will be disclosed publicly, such as enhanced fee, governance and network information, as it currently is. But other information that;s potentially proprietary, sensitive or developing will be available to the PCAOB only for oversight.

The amendments enhance the required current reporting of information by registered firms on the PCAOB’s public Annual Report Form (“Form 2”), and the Special Reporting Form (“Form 3”) in several key areas:

Financial information – On Form 2, all registered firms will need to report additional fee information. The largest firms will also be required to confidentially submit financial statements to the PCAOB.

Governance information – On Form 2, all registered firms will be required to report additional information regarding their leadership, legal structure, ownership, and other governance information, including reporting on certain key quality control operational and oversight roles.

Network relationships – Registered firms will be required to report a more detailed description of any network arrangement to which a registered firm is subject. That includes describing the network’s structure, the registered entity’s access to resources such as audit methodologies and training, and whether the firm shares information with the network regarding its audits (including whether the firm is subject to inspection by the network).

Special reporting – For annually inspected firms, the amendments include a new confidential special reporting requirement for events material to a firm’s organization, operations, liquidity or financial resources, such that they affect the provision of audit services.

Cybersecurity – On Form 3, confidentially, registered firms will be required to promptly report significant cybersecurity events to the PCAOB. On Form 2, registered firms will also be required to periodically and publicly report a brief description of any policies and procedures to identify and manage cybersecurity risks.

Updated description of QC policies and procedures – A new form will require any firm that registered with the Board prior to the date that the PCAOB’s new quality control (QC) standard becomes effective (December 15, 2025) to submit an updated statement of the firm’s quality control policies and procedures pursuant to the QC standard.

After the original proposal in April on firm reporting, the PCAOB received input that caused it to modify the requirements to focus on specific disclosures that should be most useful to PCAOB staff, investors, audit committees and others. Among other changes made since these amendments were first proposed, the PCAOB:

  • Streamlined fee disclosure requirements;
  • Eliminated the proposed requirement that financial statements conform to an applicable financial reporting framework (such as U.S. generally accepted accounting principles) and instead prescribed certain minimum financial statement reporting requirements;
  • Streamlined requirements related to firm governance and network arrangements;
  • Maintained the Form 3 reporting timeframe of 30 days for existing special reporting items to ease potential burden – particularly for smaller firms – while still requiring more timely reporting of events of sufficient significance and urgency (such as cybersecurity); and,
  • Modified the material event reporting requirement to better focus on information relevant to a firm’s audit practice – and limited the material event reporting requirement to firms that are annually inspected.

The amendments are subject to approval by the Securities and Exchange Commission. If they’re approved by the SEC, they will become effective in stages. The PCAOB is encouraging firms and others to carefully review the “effective date” sections in both adopting release documents to understand the various phases. The PCAOB intends to issue resources to assist firms with implementation of these requirements.

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