A Pennsylvania preparer was sentenced to 6 years in prison after pleading guilty for preparing false tax returns. Waylon Wilcox, prosecutors allege, hid more than $12.3 million in CryptoPunk non-fungible token (NFT) sale proceeds as taxable income. Wilcox has been charged with intentionally underreporting his income and using fraudulent tactics to drastically lower his tax liability in both calendar years 2021 and 2022.
Wilcox as having not reported significant income from cryptocurrency trades. The U.S. Attorney’s Office for the Middle District of Pennsylvania has charged Wilcox with felony counts of filing false returns. So in doing so, he falsely claimed on those returns that he received $0 related to digital assets. He pleaded guilty last week to two felony counts of willfully falsifying tax returns.
Also like that defendant, prosecutors assert that Wilcox sold 97 CryptoPunks totaling $12.3 million in value across two years. He purportedly failed to report over $8.5 million of his 2021 income, avoiding almost $2.2 million in taxes. In 2022, for instance, he purportedly concealed almost $4.6 million of his earnings. This scheme saved his defrauded tax bill by more than $1 million.
For example, officials said that Wilcox made the bulk of his unreported income by selling 97 CryptoPunk NFTs in 2021 and 2022. This case serves as a reminder of the IRS’s scrutiny on virtual currency and NFT transactions.
IRS Criminal Investigation is committed to unraveling complex financial schemes involving virtual currencies and non-fungible token (NFT) transactions designed to conceal taxable income. In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe. - Yury Kruty, Philadelphia Field Office Special Agent in Charge
Wilcox is scheduled to face a maximum penalty of 6 years imprisonment. He is scheduled to be sentenced at a later date.
