FTX Continues Tax Dispute with IRS Amidst Bankruptcy Proceedings - Latest cryptocurrency news

FTX Continues Tax Dispute with IRS Amidst Bankruptcy Proceedings

The tax dispute between the defunct cryptocurrency exchange FTX and the U.S. Internal Revenue Service (IRS) is ongoing. In their latest court filing, FTX’s lawyers requested information on how the IRS calculated the unpaid tax debt. Initially determined at $44 billion, the debt was later reduced to $24 billion.

In their latest submission to the Delaware bankruptcy court, FTX’s lawyers asked the IRS to substantiate the claim against FTX and to explain how the mentioned tax amount was calculated. This request is part of the ongoing dispute between the IRS and FTX, concerning how much unpaid tax debt the collapsed cryptocurrency exchange and its affiliated companies owe to the government.

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Despite FTX claiming it owes no tax debt to the IRS, the tax authority has calculated a debt of $24 billion. This amount is more than three times the current sum FTX is supposed to compensate its creditors. The lawyers argue that during FTX’s short three-year lifespan, it never distributed dividends or earnings and did not earn enough to support the IRS’s claim of a $24 billion tax debt.

The IRS explains the reasons for the $24 billion debt by indicating that FTX had liabilities for income taxes, employment taxes, and penalties from 2018-2022. As the IRS’s audit is ongoing, this is not yet a final figure. FTX has described the claim as “absurd and baseless.” According to court documents, both FTX and the accounting firm EY have responded to over 2,300 requests for information from the IRS and have provided almost all the documents requested by the IRS.

In its filing yesterday, FTX strongly argued for the approval of a program that will prevent indefinite delays in distributions to victims. The next hearing in the FTX bankruptcy case is scheduled for December 13th.

Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
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