FTX Claims U.S. Government’s $24 Billion Tax Demand is Just “Alice in Wonderland” Logic

FTX Challenges IRS's 'Alice in Wonderland' Tax Demand

IRS’s ‘Alice in Wonderland’ tax claim disputed by FTX

In a court filing on Sunday, FTX, the bankrupt crypto exchange, lambasted the U.S. government’s claim for $24 billion in unpaid taxes, calling it a cruel robbery of its victims’ cash. But hey, who needs facts and figures when you can have a little Wonderland-esque logic?

According to FTX, not only is the claimed amount disputed, but there’s also no other source of cash to compensate for the mind-boggling demand. Unless a judge intervenes and rejects the Internal Revenue Service’s (IRS) demands, the victims of FTX’s shenanigans won’t be seeing a penny of meaningful recovery. Talk about rubbing salt in the wound.

FTX, drenched in frustration, said in the filing, “This Alice in Wonderland argument has no support in the law. There is simply no basis to support the IRS’s meritless claims that the Debtors owe tax in an amount that is orders of magnitude greater than any income the Debtors ever earned and that would effectively prevent most of FTX’s creditors – themselves victims of fraud – from obtaining any meaningful recovery.”

The U.S. government, on the other hand, insists it’s not out for a windfall, but rather to determine the correct amount of tax liabilities. Sure, sure, just like the Queen of Hearts wasn’t really obsessed with chopping off heads.

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FTX, infamous for its drama-filled downfall, filed for bankruptcy in November last year, after a CoinDesk report sent shockwaves through the crypto community. But wait, there’s more! The founder of FTX, Bankman-Fried, was found guilty of seven counts of fraud and conspiracy. Looks like this wonderland has a Mad Hatter after all. His sentencing is just around the corner in February 2024.

FTX did acknowledge that the court has the power to determine the amount owed to the IRS, but they argue that the government’s proposal for the determination process would unreasonably delay the entire case. Can’t let Wonderland lose its magic, can we?

In the midst of all this chaos, we can’t help but wonder: what will be the fate of FTX and its victims? Will justice prevail, or will the IRS have its way with them? Stay tuned for the unpredictable twists and turns of this crypto trilogy.

Read More: U.S. Lawmakers Urge Treasury to Revise Proposed Crypto Tax Rules

Written by the inimitable Sheldon Reback.

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