MicroStrategy (US:MSTR) shares fell 4% on Wednesday after Washington DC authorities claimed company Chairman Michael Saylor lived in its jurisdiction for over ten years without paying taxes there, and they are suing to recoup the debt.

Washington DC’s Attorney General, Karl Racine, on Wednesday afternoon tweeted:

“Today, we’re suing Michael Saylor – a billionaire tech executive who has lived in the District for more than a decade but has never paid any DC income taxes – for tax fraud.”

The District said it’s also suing MicroStrategy, alleging that it conspired with Saylor to evade back taxes he “owes on hundreds of millions of dollars earned while living in DC.”

Racine said the suit is the first brought since the recently amended False Claims Act adoption. The act encourages whistleblowers to report tax evasion.

Saylor responded to various media outlets on Wednesday, disputing the allegations and claiming he’s been a Miami Beach resident for the last ten years. He said Microstrategy is based in Virginia.

The suit is the latest headwind for MSTR’s stock which is already off 57% this year as its fortunes are wedded to Bitcoin’s price.

MicroStrategy held about 130,000 Bitcoin on its balance sheet, and they’ve lost $2 billion since the firm’s purchase.

Early this month, Saylor resigned as chief executive officer. He adopted the newly created Executive Chairman post to manage the Bitcoin albatross.

Former Chief Financial Officer Phong Le inherits the CEO office.

Saylor said the decision is crucial for him to tackle Bitcoin issues while Le manages growing the firm’s enterprise analytics software business and run operations.

Microstrategy barely missed analysts’ second quarter $123 million consensus revenue forecast, and sell-side analysts remain primarily bullish. The researchers rated the shares ‘overweight’ and gave them a $500 price target, more than double the current value.

Jefferies remains the only bearish voice, rating the stock “sell” and targeting $180 a share.

Fintel research suggests MSTR could be primed for a short squeeze and cited its top 1% ranking out of 5,306 companies screened for comparison.

Investors are short roughly a third of MicroStrategy’s float, and it would take six trading days at average volume to cover that position.

The options market paints a more neutral outlook.

MicroStrategy’s 1.01 put/call ratio lands it barely above neutral and just into bearish territory.

This article originally appeared on Fintel

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