Photo: Ian Dyball (Getty Images)
Can’t we all just get along? Not if you’re an employee of the federal government. The Internal Revenue Service (IRS) just filed a lawsuit against the Federal Deposit Insurance Corporation (FDIC) over a $1.45 billion tax bill stemming from the bailout of Silicon Valley Bank.
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In other words, the US government filed a lawsuit against the US government. May the best bureaucracy win.
Back in 2023, Silicon Valley Bank collapsed overnight. It threatened to take the entire global financial system down with it, so the US government stepped in to save the day. The FDIC took over the bank and promised to make its customers whole. Since then, the FDIC’s been gathering Silicon Valley Bank’s assets to try and pay back its deposits. That includes $1.93 billion in cash, but with those assets comes a massive tax bill, one that the FDIC feels like it shouldn’t have to pay. The IRS, on the other hand, would really like to have that money, please, according to a report in Reuters.
In fact, the IRS wants it so bad it’s making a whole federal case about it. According to America’s top tax men, Silicon Valley Bank was on the hook for an estimated $1.45 billion for the period from 2020 through 2023. The FDIC denied the IRS’s tax claim, and now it’s up to the courts to decide.
The IRS and the FDIC did not immediately respond to requests for comment.
The IRS admits that the bill may come out to less than the $1.45 big ones it initially asked for. The IRS was in the middle of tallying up the bank’s bill when it filed the initial claim, and it was determined that Silicon Valley Bank already paid some of the employment taxes included in the original estimate. Still, whatever the exact tax burden comes out to be, it’s probably more than the zero offered by the FDIC.