In a petition filed with the bankruptcy court, the lawyer representing the collapsed cryptocurrency exchange FTX requested the US Internal Revenue Service to revise and clarify the tax proposal that the agency is imposing.
FTX is currently in a dispute with the IRS over taxes. FTX maintains that it does not owe any taxes, while the IRS believes that the exchange is liable to pay up to $24 billion in taxes. The lawyer representing FTX claims that the exchange has not paid any dividends or recorded high revenue that would require it to pay such a large sum of taxes during its three years of operation.
The lawyer affirmed that the only way for FTX to pay taxes is to reduce the amount of compensation for customers, which would affect the amount that each user stuck with money on the exchange can receive back, and delay the process of returning assets, expected to begin in Q2/2024.
Therefore, the exchange’s representative declared that the IRS’s tax demand is “ridiculous and baseless.” The lawyer also revealed that FTX has responded to 2,300 information requests from the tax authorities, providing all the requested documents, except for some records that will be transferred in January 2024.
Previously, the US Taxation Department had requested FTX, Alameda, and Sam Bankman-Fried’s subsidiaries to pay taxes up to $44 billion. By November, this figure was adjusted down to $24 billion.
According to the IRS, the $24 billion figure is related to corporate income tax, social security tax for employees, and fines that FTX must bear from 2018 to 2022. However, the tax authorities stated that this is still not the final figure because they are still waiting for the audit results.