The IRS Should Substantiate Claim Against FTX, Say Lawyers
The lawyers representing FTX have called on the Internal Revenue Service (IRS) to provide evidence for its claim against the bankrupt exchange. In a filing to a Delaware bankruptcy court, FTX’s lawyers stated that the IRS needs to show how it estimated the back taxes it says are due. This is the latest development in an ongoing dispute between FTX and the IRS over the amount owed in unpaid taxes.
FTX Claims It Owes Nothing, But IRS Wants $24 Billion
FTX maintains that it does not owe anything to the IRS, while the tax agency is seeking as much as $24 billion. The lawyers representing FTX argue that the exchange never earned enough to support the IRS’s claims for such a large sum. They also highlight that FTX has lost a significant amount of money rather than making profits.
IRS Initially Claimed $44 Billion, Now Seeking $24 Billion
The initial claim made by the IRS was for approximately $44 billion, but this amount was later amended to $43 billion and then reduced further to $24 billion. The IRS states that this sum is related to income taxes, employment taxes, and penalties owed by FTX and its affiliates from 2018 to 2022. However, this figure is not final as an audit is still ongoing.
FTX Calls Claim “Absurd and Meritless”
FTX has dismissed the IRS’s claim as “absurd and meritless.” The exchange and accounting firm EY have provided almost all of the requested documents in response to over 2,300 information requests from the IRS. Some outstanding documents will be provided by January 15, 2024. FTX argues that it is not the burden of proof and calls the IRS’s statements an “Alice in Wonderland argument.”
FTX Urges Approval of Schedule to Avoid Delaying Distributions
In its recent filing, FTX emphasizes the need for the court to approve a suggested schedule to prevent delays in distributing funds to creditors. The next hearing in the FTX bankruptcy case is scheduled for Wednesday, December 13.
Hot Take: FTX Lawyers Demand Substantiation of IRS Claim in Ongoing Dispute
The lawyers representing FTX have challenged the Internal Revenue Service (IRS) to provide evidence for its claim of unpaid taxes against the bankrupt exchange. FTX maintains that it owes nothing to the IRS, while the tax agency seeks a staggering $24 billion. FTX’s lawyers argue that the IRS has not shown how it estimated this amount and state that FTX never earned enough to support such a large tax claim. This dispute underscores the ongoing battle between FTX and the IRS over financial obligations and could have significant implications for the distribution of funds to creditors.
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