FTX Challenges IRS’s $24 Billion Claim in Bankruptcy Proceedings
The bankrupt estate of FTX has taken a bold step to contest the United States Internal Revenue Service’s (IRS) claim against it, seeking court approval to reduce the $24 billion demand to zero. FTX argues that this move is necessary to prevent the IRS claims from disrupting its bankruptcy proceedings.
IRS Imposes Massive Tax Bill on FTX
Earlier this year, the IRS imposed a staggering tax bill of approximately $44 billion on FTX and its associated Alameda groups. This included a $20.4 billion claim against Alameda Research LLC and a $7.9 billion claim for unpaid taxes. The IRS later revised its demand to $24 billion, which FTX now challenges as speculative and unsupported.
FTX Argues Claim is Inflated
FTX disputes the validity of the IRS’s claim, asserting that the $24 billion amount is grossly inflated. The firm argues that it exceeds its total earnings by over fifty times and is several times the value available for distribution to creditors. Furthermore, FTX questions the IRS’s assessment methods and raises doubts about the agency’s dismissal of tax returns prepared by Ernst & Young LLP.
Concerns Over Lengthy Legal Battle
In addition, FTX is concerned that resolving the IRS claims could lead to a prolonged legal battle, potentially delaying distributions to customers and creditors. To avoid such delays, FTX urges the court to estimate the IRS claims at zero dollars, ensuring timely progress in its bankruptcy proceedings.
Hot Take: FTX Challenges IRS’s Multi-Billion Dollar Claim in Bankruptcy Case
The bankrupt estate of FTX is pushing back against the United States Internal Revenue Service’s $24 billion claim, asserting that it is inflated and lacks a clear basis. FTX argues that the claim far exceeds its earnings and available funds for distribution to creditors. Additionally, concerns over a protracted legal battle and the potential disruption to bankruptcy proceedings have prompted FTX to seek court approval to reduce the claim to zero. This move is crucial for FTX to protect its customers and creditors and ensure a timely resolution of its bankruptcy case.
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