FTX Group Hit With Tax Claims Worth Over $40 Billion

In a stunning development in the FTX Group’s drawn-out bankruptcy case, the IRS has recently filed claims against the default entity that dwarf any prior ones and cast doubt on its prior idea of re-opening for business.

Over $40 Billion in Unpaid Taxes

In order to put this development into perspective, as recently as January, it was believed that the 50 biggest creditors of FTX were owed about $3 billion cumulatively. Although the total amount owed to creditors added up to over $8 billion, this could have been manageable for a company that still had some good investments in its portfolio.

However, this all went out the window just recently, when the IRS filed 45 claims against entities of the FTX Group, cumulatively worth around $44 billion.

Unpaid Employment Taxes

The full list of claims has been uploaded to restructuring firm Kroll’s website. The largest claim is worth a shocking $20.4 billion, followed by another one worth more than $7 billion, and two worth over $2 billion each. The remaining 41 claims round the total up by another cool $13 billion.

Although the exact breakdown of the tax filings is unavailable for most of these claims, a leaked document showcasing the biggest one has been circulating online and seems to target unpaid employer-side employment taxes.

It seems that following an investigation, the IRS reclassified FTX Group personnel as employees, not contractors, resulting in a massive tax bill.

The sheer amount now owed by the FTX Group to the U.S. Government massively outshines the amount owed to businesses and everyday investors. The trouble with this is that, according to U.S. legal precedent, any claims by unsecured creditors can only be compensated after the U.S. government gets paid off.

“The problem with this annoying tax bill isn’t just the fact that there is now another massive creditor of Alameda (which would reduce FTX’s pro rata share of Alameda’s estate).

The problem is that this tax claim would have priority over FTX’s claim. under the US bankruptcy code, Uncle Sam has priority over unsecured creditors, which means this massive 20bn tax bill needs to be paid off before any money can even flow from Alameda to FTX Intl.”

For the moment, these claims have not been discussed in court, at least not publicly. It remains to be seen how lawyers for the IRS will choose to pursue these claims, given the highly publicized nature of the court case.

The post FTX Group Hit With Tax Claims Worth Over $40 Billion appeared first on CryptoPotato.

newsby.top • 2023