FTX Trading Ltd. has requested a bankruptcy court to dismiss the estimated $24 billion in claims made by the Internal Revenue Service (IRS).
FTX argues that the government has not provided a logical basis for this figure, and the unexplained tax claims pose a significant threat to the company’s recovery and distribution of assets to customers and other creditors.
FTX urged the court to either value the tax claims at zero or determine an amount through trial. If not, the company fears that a substantial portion, if not all, of its assets, would have to be set aside to cover IRS claims, hindering progress in the bankruptcy process.
The IRS has lodged 47 unresolved claims against FTX, projecting a total tax obligation of approximately $24 billion, as per the latest filing on Wednesday. However, FTX’s advisors argue that the company not only owes no taxes but has over $11 billion in net taxable losses.
FTX is suggesting a swift claims estimation trial on February 27, asserting that this can be achieved due to their prompt responses to around 1,100 information requests from IRS audit teams.
The IRS has made allegations against FTX, claiming that the company owes various taxes, including unemployment, payroll withholding, income, and partnership taxes. The documents provided by the IRS are not very detailed.
FTX is facing over 36,000 claims from customers and over 2,300 claims from non-customers, totaling around $40 billion. Edgar W. Mosley II, an adviser to FTX, revealed this information in a declaration. The IRS claims to make up about half of the total non-customer claims.
Up until October, FTX has already paid out more than $351 million to professionals. As of October 31, the company has approximately $2.6 billion in total cash in its bank accounts, as stated in a financial update filed with the court on Thursday.
Also Read: FTX Now Allowed to Sell Over $873M Assets To Repay Creditors
