IRS wants $38 billion tax from Alameda
According to recent filings by the claims agent of bankrupt cryptocurrency exchange FTX, the United States Internal Revenue Service is claiming a total of $44 billion from the exchange’s bankruptcy and related firms, including $38 billion against its sister quantitative trading firm, Alameda Research. In one single claim, the IRS assessed $20.4 billion in unpaid partnership and payroll taxes against Alameda Research LLC.
Founded in September 2017 by Sam Bankman-Fried and Tara Mac Aulay and led by Caroline Ellison, Alameda was headquartered in Hong Kong and conducted up to $5 billion worth of trades per day at its peak. Hong Kong does not levy taxes on capital gains. However, being U.S. nationals, its founders and key executives are obligated to pay taxes on their worldwide income irrespective of where they reside and how many days they actually spend in the U.S. each year, under the highly unusual U.S. taxation by citizenship regime.
The partnership taxes assessed by the IRS suggests it believes the entity operated on a partnership basis, where, unlike corporations, profits are not taxed at the entity level but are instead “passed through” to its partners and subsequently taxed at the individual level.
If the IRS prevails, it could mean bad news for the creditors. According to the filing, the IRS is claiming a total unpaid taxes of $44 billion from FTX and related companies. The IRS claims would take precedence over those of unsecured creditors, such as FTX’s one million users, during bankruptcy proceedings. Despite their best efforts, bankruptcy trustees and law firms have only managed to locate $7.3 billion in assets from FTX and related entities.
A purported $20.4 billion IRS claim against Alameda Research circulating this week. (Twitter)
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