McClatchy D.C. is reporting that Robert Mercer, owner of Renaissance Technologies, owes the Internal Revenue Service a $7 billion in back taxes.
The Internal Revenue Service is demanding a whopping $7 billion or more in back taxes from the world’s most profitable hedge fund, whose boss’s wealth and cyber savvy helped Donald Trump pole-vault into the White House.
Renaissance Technologies, and other hedge funds have been employing a tax avoidance scheme that the IRS has declared unlawful.
Since the IRS found in 2010 that a complicated banking method used by Renaissance and about 10 other hedge funds was a tax-avoidance scheme, Mercer has gotten increasingly active in politics. According to data from the Center for Responsive Politics, he doled out more than $22 million to outside conservative groups seeking to influence last year’s elections, while advocating the abolition of the IRS and much of the federal government.
The IRS released an advisory opinion concerning 'basket options', the financial instruments Renaissance Technologies uses to avoid paying taxes, saying that they will be targeted in future audits by the agency.
The IRS recently released a little-noticed advisory stating that its top targets in future business audits will include so-called “basket options,” the instruments that Renaissance and some other hedge funds have used to convert short-term capital gains to long-term profits that have lower tax rates.
Renaissance Technologies has shown indifference to this IRS advisory opinion.