INTERNATIONAL_ Billionaire David Baszucki, CEO of Roblox, has found a legal “loophole” to avoid paying millions of dollars in taxes.
The US tax law is said to still have loopholes related to tax exemptions. As a result, the super-rich can avoid paying most of the taxes they are obligated to pay. Foreign media have discovered that Roblox CEO, David Baszucki, has evaded taxes with his tricks.
Billionaire David Baszucki, best known as the CEO of Roblox Corporation, found a loophole in the law to avoid millions of dollars in taxes. According to the latest reports, he has given many shares of his company to family members.
Baszucki and many of his relatives tried to multiply the tax relief by at least 12 times. The so-called Qualified Small Business Shares (QSBS) tax relief was introduced in the 90s to encourage people to invest in small companies.
Its purpose is to help small businesses in raising capital due to tax-free incentives, at least $10 million. But in the end many people took advantage of this to use trickery to pay taxes while the company’s revenue far exceeded the size of a small business. This will cost the US government at least $60 billion over the next 10 years.
When David Baszucki founded Roblox in 2004, it was really a small game company. It got bigger over the next few years and started raising its first million dollars from investors. That’s when Baszucki and his wife Jan Ellison came up with a policy to get tax breaks and avoid paying a portion of future profits.
So they split Roblox stock among their four children and several other family members, including Baszucki’s mother-in-law and the CEO’s brother-in-law.
Considering that Roblox was still a relatively small business at the time, all relatives also received a tax break on future profits because they were given these shares when the company was undervalued.
Last year, Roblox announced plans to go public. So David Baszucki and his family still have to figure out how to avoid federal taxes before the IPO. If Baszucki and his wife decide to give away 40% more Roblox stock (considering all the shares they’ve donated over the years). So his mother-in-law gave her stock to more family members in 2020.
When Roblox went public earlier this year, David Baszucki not only became a billionaire but also made hundreds of millions of dollars in tax evasion.
When the case was discovered, according to the lawyer, it also did not violate the tax policy of the authorities. Because this is not part of the law, it does not constitute a crime. But the authorities said that as an executive director and developer of Roblox, this is absolutely not advisable and it goes against the obligations of a citizen, a business before the state.