FTX Contests IRS's $24 Billion Tax Bill, Claims Adverse Impact on Victims Recovery

By: Eva Baxter

A colossal $24 billion tax bill proposed by the United States Internal Revenue Service (IRS) is being disputed by bankrupt crypto exchange FTX. The firm asserts that it has “never earned anything anywhere near the amount” which justifies such a massive bill. FTX's central argument is that the tax bill will essentially consume any “meaningful recovery” that was meant to assist victims of the crypto exchange.

Since May, the IRS has been attempting to recover tax arrears from FTX and its sister firm, Alameda Research. Initially, the IRS claimed a staggering $44 billion across 45 distinct claims against FTX and its subsidiaries, but lately reduced this figure to $24 billion. FTX, however, maintains that the IRS's claims are meritless.

In a recent filing to a Delaware-based bankruptcy court, FTX disclosed that the IRS's demands would directly impact funds earmarked to reimburse affected FTX users. FTX thus alleges that the U.S. government's claim for unpaid taxes has only one source – diverting recovery funds away from its victims.