Pennsylvania man enters guilty plea for false CryptoPunks sales tax returns filing
Waylon Wilcox, a 45-year-old resident of Dillsburg, Pennsylvania, has pleaded guilty to filing false income tax returns after failing to report over $13 million in profits from the sale of 97 CryptoPunks NFTs between 2021 and 2022. This omission resulted in an estimated $3.2 million in unpaid taxes.
In 2021, Wilcox sold approximately 62 CryptoPunks NFTs, earning about $7.4 million, and in 2022, he sold around 35 more, generating nearly $4.9 million. Despite these substantial earnings, he falsely indicated on his tax returns that he had no virtual asset income, effectively reducing his tax liabilities by over $3 million across both years.
Wilcox entered his guilty plea on April 9, 2025, before Senior U.S. District Judge Malachy E. Mannion in the Middle District of Pennsylvania. He now faces up to six years in federal prison, supervised release, and significant fines. His sentencing date has yet to be determined.
This case underscores the Internal Revenue Service's commitment to enforcing tax compliance in the rapidly evolving digital asset space. IRS Criminal Investigation is actively working to uncover complex financial schemes involving virtual currencies and non-fungible token (NFT) transactions designed to conceal taxable income.
Under current IRS guidelines, any sale of digital assets, including NFTs, is considered a taxable event, and gains must be reported accordingly. Taxpayers are required to report sales proceeds and any gains or losses from the sale of NFTs on their individual tax returns.
Wilcox's case serves as a cautionary tale for digital asset traders, highlighting the importance of accurately reporting all income to avoid severe legal consequences.
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