Bitcoin investor says he stopped paying taxes to stack more BTC

A Florida man earned more than 700,000 views on X for explaining how he’s intentionally paying his taxes late to buy more bitcoin (BTC).

He seems to think that the 7.55% APR penalty interest that the US Internal Revenue Service (IRS) charges for his tax “payment plan” makes buying BTC instead of paying his taxes on time a smart trade, because he believes BTC will rally more than that.

Describing his conduct, he said he “stopped paying taxes from my paycheck and bought BTC instead.” He then applied for a tax payment plan and is paying off his balance over three years, including penalties that he considers modest.

He claimed his intentionally late tax payments make him “A BTC treasury company, personified.”

Last year I stopped paying taxes from my paycheck and bought BTC instead.

In April I did my taxes; I paid nothing and waited for them to contact me back.

Today I received notice from IRS that I owe them. I was waiting for this. I am choosing to pay over 36 months instead,… pic.twitter.com/xAdH2Gtxnb

Only the US government has the enforcement power over any misdemeanor conduct under 26 U.S. Code § 7203, “Willful failure to pay tax.”

On the IRS website, payments plans are repeatedly qualified with the condition that both short-term and long-term payment plans are for people who cannot pay on-time.

“If you can’t pay in full immediately, you may qualify for additional time,” reads IRS Topic number 202.

It continues, “If you’re not able to pay your balance in full immediately or within 180 days, you may qualify for a monthly payment plan.”

Protos staff wanted to confirm that this declaration was visible on the website at the point of application. Indeed, at irs.gov/payments — the logged-in version where a taxpayer would apply for a payment plan — directly above the button “Apply for a payment plan,” the following text appears: “If you can’t pay what you owe, you have options. Apply for a payment plan.”

This condition of ability to pay, not willingness to pay is repeated across the IRS website.

On its FAQ page, the IRS reiterates, “If you can’t pay the full amount due, pay as much as you can and visit IRS.gov/payments to consider our online payment options.”

The Florida man posted that he stopped paying taxes and bought BTC instead. He filed his return in April, paid nothing, and sat back to see what would happen. When the IRS reminded him that his taxes were overdue, he wrote, “I was waiting for this.”

He has a name for his conduct. Asked about the maneuver, Lux called it “Creative accounting.” He retweeted a claim by an interesting tax professional who agreed that “the US treasury is cheaper than a HELOC, credit card.”

Read more: Does Ross Ulbricht owe back taxes on crypto donations?

Despite the obvious concerns, the man insists that none of this is a problem.

He told one skeptic his personal view of the law, “This has been legal for many years; it just easier now with a very user-friendly IRS web form.”

In the 1943 Supreme Court case Spies v. United States, the Court held that a wilful failure to pay taxes, on its own, is only a misdemeanour. Any felony conviction requires an affirmative act of evasion, i.e. intent to not pay.

The Court repeated that point in the 1965 case Sansone v. United States, confirming that tax evasion requires an affirmative intention to not pay.

The man in Florida who simply intended to pay taxes over time, rather than not pay at all, is therefore probably not guilty of any felony. The only question is whether the conduct could be a misdemeanor.

Unconcerned, when asked whether he would run the payment plan scheme in future years, he replied “Most probably.” 

Asked whether he had really done it, he confidently answered, “Yes and I’m not the only person to do this either.” 

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