TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, November 3, 2017

$6.8 Billion Hedge Fund Tax Dispute Moves to IRS Appeals Office

RenaissanceFollowing up on my previous post, Senate Report Criticizes Hedge Funds' Use of Basket Options Tax Strategy:  Bloomberg, Mercer Hedge Fund Tax Dispute Moves to IRS Appeals Office:

A tax dispute involving Renaissance Technologies, the hedge fund firm whose co-chief executive officer is a prominent backer of President Donald Trump, is advancing to a new phase.

Members of the Internal Revenue Service’s Office of Appeals are scheduled to meet with lawyers for Renaissance in New York on Nov. 7, according to a person with knowledge of the matter. The meeting kicks off a review by an independent branch of the tax agency and suggests a resolution may be years away.

Although the dollar amount at issue has never been made public, Senate investigators estimated that Renaissance employees may have pocketed about $6.8 billion through what a bipartisan panel in 2014 called an “abusive” tax shelter. Renaissance executives maintain the transactions at issue were within the law and weren’t driven by tax savings.

Underscoring the stakes for Renaissance is the legal team it has assembled at Skadden Arps Slate Meagher & Flom LLP. It includes B. John Williams, a former IRS chief counsel and tax court judge; Fred Goldberg, a former IRS commissioner; and Diane Ryan, the former chief of the agency’s appeals unit, according to the person with knowledge of the matter, who spoke on condition of anonymity.

http://taxprof.typepad.com/taxprof_blog/2017/11/68-billion-hedge-fund-tax-dispute-moves-to-irs-appeals-office.html

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