According to Bloomberg, bankrupt exchange FTX has reached a settlement with the Internal Revenue Service (IRS) over its $24 billion tax issue. Zombit previously reported that the IRS claimed that it estimated that FTX and its affiliated entities owed a total of approximately $24 billion in taxes from 2018 to 2022. This dispute caused a bottleneck in the restructuring plan. Since the collection of taxes takes priority over ordinary claims, the restructuring plan cannot proceed until the tax issue is resolved.
According to the latest settlement agreement, the IRS will receive a $200 million priority claim, which will be paid within 60 days after the company's proposed reorganization plan takes effect, and an additional $685 million in subordinate claims, which will be paid within 60 days after the company's proposed reorganization plan takes effect. Payments will be made after customers and other creditors have been paid and funds remain available.
FTX said in its filing on Monday:
"The settlement provides much-needed certainty to the size of the IRS's claims and enables the Chapter 11 bankruptcy proceeding to be resolved expeditiously, allowing for timely distributions to the Debtor's other creditors and customers."
This article FTX IRS reaches settlement! How much do you need to pay for the sky-high tax of 24 billion magnesium? First appeared in Zombit.