FTX and the IRS: A Battle of Billions

FTX Disputes IRS's $24B Tax Claim, Citing Lack of Supporting Evidence

FTX disputes IRS $24B tax claim, citing lack of evidence

Picture this: a heated courtroom, lawyers in impeccably tailored suits, and a battle of epic proportions. In one corner, we have the bankrupt cryptocurrency exchange, FTX. And in the other corner, the not-so-friendly neighborhood tax agency, the United States Internal Revenue Service (IRS). The stakes? A mind-boggling $24 billion in unpaid taxes.

But hold on a second! FTX lawyers are not going down without a fight. They are demanding evidence. They want the IRS to show them the money! In a recent filing with a Delaware bankruptcy court, FTX vehemently denied any liability. And by vehemently, we mean they called the IRS’s claims “absurd and meritless.” Ouch, that has got to sting.

You see, the IRS initially demanded a whopping $44 billion in unpaid taxes. But they must have had a change of heart, because they later revised it to $43 billion, and finally settled on $24 billion. Despite the fancy numbers, FTX lawyers are making it crystal clear that these estimated figures are as believable as finding Bigfoot riding a unicorn.

The core of FTX’s argument lies in the fact that they never made any profits. Zip, zero, zilch. In fact, they were knee-deep in losses. And we’re talking about losses to the tune of $11 billion. To put that into perspective, that’s like dropping your sandwich on the floor and watching your entire lunch disappear into thin air. Poof!

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To prove their case, FTX collaborated with the financial auditing firm EY. And what they found is mind-boggling. FTX’s maximum earnings from their crypto exchange operations were a mere $334 million. Now, compare that to the IRS’s claim of $24 billion. It’s like comparing a goldfish to a blue whale. A tiny fish in a vast ocean of exaggeration.

But here’s the kicker: if FTX is forced to pay up, it could jeopardize the repayment of funds to the exchange’s victims. Talk about adding insult to injury! FTX’s lawyers argue that the IRS’s insistence on their demands is delaying justice for those who were defrauded. It’s like denying a starving man his first bite of pizza.

FTX claims it has been playing nice with the IRS since day one. They’ve responded to over 2,300 information requests, bending over backwards to provide the requested documents. And the remaining ones? They’ll be submitted by January 15, 2024. So, the ball is in the IRS’s court now. The upcoming hearing on December 13 will unveil if FTX’s efforts were enough to sway the judgment in their favor.

In the end, it’s not just a battle of billions. It’s a battle for justice, a battle to ensure that creditors and victims get their fair share. FTX’s lawyers have made it clear that the IRS’s claims are like a house of cards, ready to collapse at the slightest breeze of scrutiny. Let’s hope the court sees the absurdity of it all and delivers a verdict that brings this saga to a fair and just conclusion.

But hey, remember that FTX’s founder, Sam Bankman-Fried, was recently convicted of defrauding FTX users and investors. It seems like FTX just can’t catch a break.

So, dear readers, what do you think? Are the IRS’s claims as empty as a Monday morning coffee cup? Or is FTX really holding their breath against a tidal wave of unpaid taxes? Share your thoughts in the comments below!

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