Cooperman Wins Tax Fight With IRS

Dec 9 2011 | 10:01am ET

Hedge fund billionaire Leon Cooperman has beaten a $5 million penalty for unpaid taxes.

The Internal Revenue Service has settled its case against Cooperman, stemming from what the Omega Advisors founder says was bad tax advice. Instead of the $5 million penalty, Cooperman will pay only $29,191, as well as the $14 million plus interest in unpaid taxes.

The billionaire argued that he had acted in good faith and shouldn't be so harshly penalized.

Cooperman's problem is this: He seeded Jana Partners, and then donated his stake in the hedge fund to his charitable foundation. Independent appraisers valued that stake at $43 million, and Cooperman, on the advice of his tax preparer, deducted the donation.

Cooperman now concedes, you aren't allowed to deduct non-publicly-traded securities donated to your own foundation. But he said that neither he nor his tax preparer were aware it wasn't allowed, and that he was "mortified" when the bill came.


In Depth

Star Fund Managers Battered By Rocky Ride In Yields, Currencies

May 28 2015 | 6:05am ET

Some of the biggest names in the investment world have been whipsawed by the recent...

Lifestyle

Yale Receives $150 Million Gift from Blackstone’s Schwarzman

May 12 2015 | 12:10am ET

Yale University announced it has received a $150 million gift from Blackstone Group...

Guest Contributor

When Less is More: The Case for Concentrated Equity Strategies

Jun 1 2015 | 7:59am ET

The conventional wisdom is that wide diversification is the “holy grail,” as...

 

Sponsored Content

Editor's Note