Seeking Penalty
The IRS argues that the short-term tax rate should have applied. It’s pursuing back taxes from Medallion investors for the 2005 to 2015 tax years, the letter states. Those years account for at least $30 billion of the $34 billion in profits sheltered by the option trades, Senate records show.
The IRS is also seeking a 20 percent penalty on underpayments, an amount that could reach more than $1 billion.
While Renaissance told investors as recently as 2014 that it planned to “vigorously contest” the IRS’s actions and predicted a “favorable resolution,” those phrases aren’t repeated in the December letter.
Simons, 80, whose net worth is estimated at $16.7 billion by the Bloomberg Billionaires Index, is among the largest donors to Democratic candidates. Mercer, 72, was co-chief executive officer at Renaissance from 2010 through 2017. He won fame for his financial support of Trump during the 2016 campaign and his ties to Stephen Bannon, the former White House chief strategist.
The case has been under review by the IRS Office of Appeals since 2017. If no resolution is reached, Renaissance could ask a court to review the agency’s decision.
This article was provided by Bloomberg News.