The announcement was made by the attorney general's office on Monday.

The district had filed a lawsuit against Saylor and his company in August 2022, accusing him of not paying income taxes while residing in the district for over a decade. The attorney general's office also alleged that MicroStrategy conspired to facilitate this tax evasion scheme.

According to the attorney general's office, Saylor avoided paying more than $25 million in taxes to the district by falsely claiming to be a resident of another state. However, Saylor disputed these allegations, stating that he currently resides in Florida and was never a resident of the District of Columbia.

In a statement to the New York Times, Saylor explained his decision to settle, saying that he wanted to avoid the "continued burdens of litigation" on himself, his friends, and his family. The settlement amount of $40 million is believed to be the largest ever recovered in an income tax fraud case in the district.

The case against Saylor and MicroStrategy highlights the ongoing efforts of authorities to crack down on tax fraud and ensure that individuals and corporations fulfill their tax obligations. The district's successful settlement with Saylor sends a strong message that tax evasion will not be tolerated and that those found guilty will face significant consequences.

Both Saylor and MicroStrategy have played prominent roles in the tech industry, with MicroStrategy being a leading provider of business intelligence software and Saylor being widely recognized as an influential figure in the cryptocurrency space.

As part of the settlement, Saylor and MicroStrategy have agreed to cooperate with the district in future tax compliance efforts. The resolution of this case serves as a reminder that tax authorities are actively monitoring and pursuing individuals and entities suspected of tax fraud, regardless of their stature or influence in the business world.

The $40 million settlement not only serves as a significant recovery for the district but also underscores the importance of upholding fair taxation practices to ensure the stability and functioning of local economies.