Hedge Fund’s Insiders Agree to Pay as Much as $7 Billion to I.R.S.


The New York Times 02 September, 2021 - 05:44pm 35 views

The agreement ends a longstanding tax dispute involving a decade’s worth of transactions at Renaissance Technologies, one of the world’s biggest and best-connected hedge funds.

The hedge fund pioneer James Simons and some of his former executives at Renaissance Technologies will pay billions of dollars to settle one of the largest federal tax disputes in history.

In a letter to investors in one of the firm’s most successful funds, Renaissance said it had reached a settlement in a long-running dispute with the Internal Revenue Service to resolve its tax treatment for a decade’s worth of trading transactions.

The settlement could be worth as much as $7 billion, according to a person with knowledge of the agreement.

The settlement is a blow to Mr. Simons, one of the hedge fund industry’s most successful investors and a prominent Democratic donor, and Robert Mercer, a former top executive at Renaissance and a onetime major campaign donor to former President Donald J. Trump. Mr. Mercer, a supporter of conservative political causes, was a major investor in Cambridge Analytica, a now-defunct political consulting firm that improperly harvested Facebook data to assist Mr. Trump’s 2016 presidential campaign.

The billions in payments to the I.R.S. will be made by current and former investors in the Renaissance funds that were the focus of the dispute. They include seven people who were members of the firm’s board between 2005 and 2015, the time period at issue, as well as their spouses. Mr. Simons will make a payment of $670 million on top of his obligation as part of that group, according to the letter.

The firm in disclosing the settlement did not divulge the total value of the payments. But in 2014, a U.S. Senate investigative committee had estimated that the amount of unpaid taxes in the dispute could reach as much as $7 billion.

This is a developing story. Check back for updates.

Read full article at The New York Times

Renaissance execs paying $7B in historic tax settlement with IRS

Seeking Alpha 02 September, 2021 - 08:00pm

Reports: Hedge fund execs to pay billions in tax settlement

The Independent 02 September, 2021 - 07:29pm

The Wall Street Journal and The New York Times reported that insiders at Renaissance Technologies agreed to the deal that could be one of the largest in U.S. history.

Among those in the settlement are Renaissance founder and prominent Democratic Party donor James Simon, and Robert Mercer, who was a major donor to former President Donald Trump’s campaign, according to the reports.

Renaissance had been locked in a yearslong dispute with the Internal Revenue Service after a Senate investigation determined that the firm used complex financial instruments to avoid paying nearly $7 billion in taxes.

The deal covers transactions between 2005 and 2015 and moves by the hedge fund to convert short-term trading gains into long-term profits, according to the reports.

Messages were left with Renaissance and the IRS seeking comment.

James Simons, Robert Mercer, Others at Renaissance to Pay Up to $7 Billion to Settle Tax Probe

The Wall Street Journal 02 September, 2021 - 04:15pm

James Simons—the quantitative-investing pioneer who started Renaissance before retiring as the firm’s chairman on Jan. 1—will make an additional “settlement payment” of $670 million, according to the firm. Mr. Simons will also pay back taxes related to his gains.

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