A man from Pennsylvania admitted to cheating on his taxes by not reporting millions he made from selling digital art during the NFT craze.
Waylon Wilcox, 45, from Dillsburg, went to federal court on April 9 and said he did not report more than $13 million of his income for the years 2021 and 2022. The request was made in front of a senior U. S official District Judge Malachy E. Mannion was charged with two counts of submitting fake income tax returns, which could lead to a maximum of six years in prison.
Federal prosecutors say that Wilcox made money by selling 97 NFTs from the CryptoPunks collection. This collection has 10,000 unique pixel-art characters created by a computer, and it became very popular during the digital collectibles boom in 2021. Each Punk acted like a digital collectible, with proof of ownership stored on the Ethereum blockchain.
Court documents reveal that Wilcox earned around $7. 4 million from selling 62 Punks in 2021 and about $4. 9 million from selling 35 Punks in 2022. Even though he got a lot of money, Wilcox reportedly said “no” on his federal tax returns when asked if he had received or sold any digital assets.
As per the U. S The Attorney’s Office for the Middle District of Pennsylvania said that some missing information reduced his federal tax payments by more than $3. 2 million—$218 million in 2021 and $1. 09 million in 2022.
“IRS Criminal Investigation is dedicated to figuring out complicated money schemes that use virtual currencies and non-fungible tokens (NFTs) to hide taxable income,” said Yury Kruty, the special agent in charge of the Philadelphia field office, in a press release. “Right now, it’s really important for Americans to trust that everyone is following the rules and paying their taxes. ”
Even though the value of CryptoPunks has dropped from almost half a million dollars to less than $70,000 now, the IRS and Department of Justice are making it clear that they are increasing their efforts to enforce laws in the online crypto world.
In the U. S According to tax rules, money made from selling NFTs must be reported as profits or losses. The IRS has changed tax forms to clearly ask if people have bought or sold digital assets. Giving false answers can lead to legal charges.
The IRS Criminal Investigation team looked into the case, and an Assistant U. S Attorney is handling the prosecution. Lawyer David C. Williams the punishment will be decided later, following federal rules.
If found guilty, Wilcox could go to jail, be watched after being released, and have to pay a large fine.