IRS Orders FTX to Pay $24 Billion in Tax Liabilities

FTX's lawyers are appealing the IRS's "absurd" demand that the exchange pay off $24 billion in debt, three times its obligations to customers. This is reported in the official petition.

Representatives of the exchange requested information from the department about the logic of such calculations.

In April, the IRS planned to collect $44 billion, but six months later cut the amount by almost half - it supposedly includes deductions from 2018 to 2022, according to Cointelegraph .

The IRS attributed the debt to unpaid income taxes, employment taxes and penalties owed to FTX and its affiliates. The figure is not final due to the ongoing audit.

The department insists that the estimates are based on a presumption of correctness, and the burden of proof to the contrary lies with FTX. Exchange representatives called such statements “the Alice in Wonderland argument.”

According to FTX's lawyers, the company has no obligations to the Internal Revenue Service. They called them "absurd and unfounded," citing Ernst & Young's partner's responses to 2,300 IRS information requests and document submissions. Some of them will be sent by January 15, 2024, the document says.

According to the statement, the organization has not distributed dividends or profits in its three-year history and "has not earned anything approaching amounts that support the agency's $24 billion tax claim." On the contrary, FTX lost a huge amount of money.

“The only source of redress for the state is the seizure of funds from the victims. Since there is no basis for filing any tax claims against debtors, the IRS's reliance on its own processes serves only to delay payments to those who are truly harmed,” the document states.

bankruptcy hearing is Dec. 13.

In October, representatives of creditors and FTX management approved a plan according to which clients will be able to expect a return of $9.2 billion by mid-2024 .

That same month, exchange management began considering three options for restructuring the platform.

Let us recall that in the last year, about half of the IRS cryptocurrency investigations involved cases of tax evasion, while three years ago, over 90% were related to money laundering.

In October, it became known about Kraken's plans to send the agency information about US users who made transactions worth more than $20,000 between 2016 and 2020. The company will comply with the relevant court order .