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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 settled in a long-running dispute with the Internal Revenue Service to resolve tax treatment on ten-year trading transactions.
According to someone familiar with the deal, the deal could be worth up to $7 billion.
The deal goes to Mr. Simons, one of the hedge fund industry’s most successful investors and a prominent Democratic donor, and Robert Mercer, a former senior executive at Renaissance and once a major campaign donor to former President Donald J. Trump. it was a blow. A supporter of conservative political causes, Mr Mercer was a key investor in Cambridge Analytica, a now-defunct political consulting firm that improperly collected Facebook data to aid in Mr Trump’s 2016 presidential campaign.
Billions of dollars in payments to the IRS will be made by current and former investors in Renaissance funds, which is the focus of the dispute. Seven people who were members of the company’s board of directors between 2005 and 2015 consist of the mentioned time period and their spouses. According to the letter, Mr. Simons will make a payment of $670 million on top of his obligation as part of this group.
Announcing the deal, the firm did not disclose the total value of the payments. But in 2014, a US Senate investigative committee estimated that the amount of unpaid taxes in the dispute could reach $7 billion.
This is a developing story. Check back for updates.
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