## FTX Reaches $200 Million Settlement with IRS Over Tax Bill
FTX, the bankrupt cryptocurrency exchange, has reached a tentative settlement with its largest creditor, the US Internal Revenue Service (IRS). According to a June 3 filing, FTX and the IRS agreed to settle the tax dispute for $24 billion, down from an initial request of $44 billion.
The deal is contingent on court approval of FTX's reorganization plan. Under the agreement, the IRS will receive $200 million in preferential tax payments within 60 days of the plan's approval, and $685 million in secondary claims, paid after customers and other creditors.
The agreement covers all tax claims through October 31, 2022. FTX stated that the settlement reduces litigation risk and increases certainty of recovery for creditors and customers.
While FTX does not deny the tax debt, it disputes the specific amount and reasons. They argued that funds misappropriated by former CEO Sam Bankman-Fried should not be taxed and disagreed with the employment tax calculation regarding the salaries of Bankman-Fried and other executives.
FTX also contends that it had valid deductions and losses that the IRS disallowed due to lack of documentation. However, the IRS disagrees and is willing to fight in court.