FTX and IRS agree to settle $200 million tax debt
Cryptocurrency exchange FTX went bankrupt We signed a contract with the U.S. Internal Revenue Service (IRS). Major creditor.
this agreement Resolving $24 billion in tax disputes This has been a major hurdle in FTX’s bankruptcy proceedings, reducing the IRS’ initial $44 billion claim against FTX, as revealed in a June 3 court filing.
This agreement covers all tax obligations through October 31, 2022. It will become effective once the court approves FTX’s reorganization plan.
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The payment terms state the following: IRS will receive $200 million As a priority tax claim, FTX must pay those fees within 60 days after the restructuring plan is approved. Additionally, the IRS $685 million in subordinated claims; This will be resolved after the claims of the customer and other creditors have been paid.
FTX believes in this agreement. Minimizes litigation risk and improves clarity of creditor and customer recoveries.
FTX acknowledges tax obligations, but I object to the IRS calculating how much I owe. FTX argues that former CEO Sam Bankman-Fried should not be taxed for the funds he embezzled and is challenging the IRS’s employment tax calculations for salaries paid to him and other executives. Additionally, FTX claims it had legitimate deductions and losses that the IRS erroneously denied due to lack of documentation.
Despite these claims, the IRS said:
The IRS informed the Debtor that it did not agree with the Debtor’s claims and that, absent an agreement, it would pursue these and other theories to impose a significant tax liability.
The agreement represents an important step toward providing FTX with a clearer path for meeting its financial obligations as it moves forward with bankruptcy proceedings.
In other news, a group of investors in April agreed to drop a class action lawsuit against Sam Bankman-Fried in return for his help in legal action against FTX’s high-profile promoters.
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