The Internal Revenue Service has retracted its claim that the Federal Deposit Insurance Corp., as receiver of Silicon Valley Bank, owes it $1.4 billion in alleged federal tax liability.
In a status report submitted Tuesday, the IRS is now seeking roughly $43.9 million for the tax years 2020 through 2022.
The IRS resolved a portion of the claim involving a reported loss in 2022, in which SVB used a “mark-to-market” method of accounting.
The tax agency sued the FDIC in February to recover $1.45 billion it claimed was due in corporate income and employment taxes between 2020 and 2023, when the FDIC stepped in as a receiver of the failed bank.
The IRS and FDIC told a judge they are nearing a resolution and asked for an additional 90 days because the stay order in the case was set to expire Sept. 5.
“The additional ninety-day stay would permit the IRS and the FDIC-Receiver to engage in settlement discussions with the hopes of resolving this matter without further involvement of the Court,” the status report said.
However, the parties must provide a status report to the court within 90 days or when the court decides.
The IRS isn’t the first government body to sue the FDIC over its takeover of SVB. New York City sued the regulator in January to collect over $2.1 million SVB owed in taxes. The city claimed corporation business tax “deficiencies” were evident for 2017 through 2021, and it also sought interest and penalties in its complaint.
A federal judge last week approved a plan by the bank’s former parent company, SVB Financial Group, to end its bankruptcy and distribute its assets to creditors and preferred equity holders.
But the FDIC has a separate ongoing case over roughly $1.9 billion in cash the agency seized during the bank’s failure. SVB Financial Group claimed the FDIC “improperly blocked” the funds while the federal agency argued the held money covers the cost of bailing out the failed bank.
