IRS Must Justify $24 Billion Tax Bill It Sent to Bankrupt FTX

US tax officials must justify a $24 billion tax bill that threatens to wipe out recoveries for victims of the fraud-tainted crypto firm FTX Trading Ltd. under a ruling made by a bankruptcy judge Wednesday.

US Bankruptcy Judge John Dorsey sided with FTX when he scheduled a hearing for early next year to decide how much the company may owe the Internal Revenue Service in unpaid taxes. The company had argued for a quicker-than-normal process to estimate the $24 billion claim.

Dorsey said he will decide at a hearing in the coming weeks which side bears the main “burden of ...