FTX lawyers have asked the Internal Revenue Service (IRS) to prove its claim against FTX and show how it estimates the taxes it says should be paid, according to a new filing in Delaware bankruptcy court.
FTX and the Internal Revenue Service (IRS) Disagree on Tax Issues
The IRS and the FTX bankruptcy estate have been in a months-long dispute over how much the bankrupt exchange and its subsidiaries owe the government in unpaid taxes.
While FTX claims it owes nothing to the IRS, the tax agency is seeking as much as $24 billion, more than three times the amount the company currently has to compensate creditors.
FTX attorneys argue that the IRS's reliance on its own processes serves to delay distributions to those truly harmed because there is no basis for asserting any tax claims against the debtors.
FTX has never distributed dividends or earnings in its short three-year lifespan and has earned nothing close to amounts that could support the IRS's $24 billion tax claim, the lawyers said. On the contrary, they added, FTX lost a large amount of money.
The IRS had initially said it owed an even larger amount, and filed initial demands for nearly $44 billion in April.
In September, it changed this amount to 43 billion dollars. In November, this figure dropped to 24 billion dollars.
The IRS says the $24 billion owed relates to income taxes, employment taxes and penalties owed by FTX and its subsidiaries from 2018 to 2022. This is still not a final figure because the IRS continues to audit.
*This is not investment advice.