{"id":9070,"date":"2024-06-05T16:38:12","date_gmt":"2024-06-05T16:38:12","guid":{"rendered":"https:\/\/www.cryptometer.io\/news\/?p=9070"},"modified":"2024-06-05T15:38:21","modified_gmt":"2024-06-05T15:38:21","slug":"ftx-reaches-200m-settlement-with-irs-on-tax-bill","status":"publish","type":"post","link":"https:\/\/www.cryptometer.io\/news\/ftx-reaches-200m-settlement-with-irs-on-tax-bill\/","title":{"rendered":"FTX Reaches $200M Settlement with IRS on Tax Bill"},"content":{"rendered":"\n<p>Bankrupt crypto exchange FTX has reached a tentative agreement with its largest creditor, the United States Internal Revenue Service (IRS), to settle a $24 billion tax dispute. This agreement, which hinges on court approval, is a significant step forward in the FTX bankruptcy process.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Settlement Details<\/h2>\n\n\n\n<p>According to a June 3 filing, the IRS initially claimed FTX owed over $44 billion in taxes. However, this amount was later reduced to $24 billion. Under the settlement, the IRS will receive $200 million as a priority tax claim, paid within 60 days of the court\u2019s approval of FTX\u2019s reorganization plan. Additionally, the IRS will collect $685 million as a subordinated claim, which will be paid after customers and other creditors.<\/p>\n\n\n\n<p>The agreement addresses all tax claims up until October 31, 2022. FTX stated that this settlement reduces litigation risk and provides greater certainty regarding creditor and customer recovery. The filing emphasized that the outcome of these proceedings would be uncertain due to the complex and novel tax law issues raised by the IRS claims.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Disputes Over Tax Liabilities<\/h2>\n\n\n\n<p>FTX does not deny owing taxes but disputes the amount and the specific reasons for the tax liability. The exchange argues that it should not be taxed on funds misappropriated by its former CEO, Sam Bankman-Fried. Additionally, FTX disagrees with the IRS\u2019s calculations for employment taxes related to salaries paid to Bankman-Fried and other executives.<\/p>\n\n\n\n<p>FTX also contends that it has valid deductions and losses that the IRS has wrongly disallowed due to a lack of proper documentation. Despite these arguments, the IRS was prepared to challenge FTX in court to impose significant tax liability.<\/p>\n\n\n\n<p>Also Read: <a href=\"https:\/\/www.cryptometer.io\/news\/sullivan-cromwell-cleared-of-wrongdoing-in-ftx-case\/\">Sullivan &amp; Cromwell Cleared of Wrongdoing in FTX Case<\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Proposed Plan for Creditor Repayment<\/h2>\n\n\n\n<p>On May 8, FTX proposed a new plan to repay creditors, aiming to fully reimburse all claims plus additional compensation. According to this plan, creditors holding claims below $50,000 will be eligible for a 118% recovery, which FTX anticipated would cover 98% of its creditors by number. Repayments will be based on the value of assets at the time of FTX\u2019s collapse in November 2022.<\/p>\n\n\n\n<p>This settlement marks a crucial step in resolving FTX\u2019s bankruptcy issues and could pave the way for smoother proceedings as the company works to satisfy its creditors.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bankrupt crypto exchange FTX has reached a tentative agreement with its largest creditor, the United States Internal Revenue Service (IRS), to settle a $24 billion tax dispute. This agreement, which hinges on court approval, is a significant step forward in the FTX bankruptcy process. Settlement Details According to a June 3 filing, the IRS initially [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":8230,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[30,43],"tags":[],"class_list":{"0":"post-9070","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-exchange","8":"category-general-news"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.2 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>FTX Reaches $200M Settlement with IRS on Tax Bill<\/title>\n<meta name=\"description\" content=\"Bankrupt crypto exchange FTX has reached a tentative agreement with its largest creditor, the United States Internal Revenue Service (IRS), to settle a\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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