Senator Seeks Action On Hedge Fund Tax Dodge

Jun 18 2014 | 8:33am ET

Sen. Ron Wyden isn’t happy that hedge funds are using insurance companies to avoid U.S. taxes—and he wants to know why something isn’t being done about it.

The Oregon Democrat last week asked the U.S. Treasury Department and Internal Revenue Service why steps were not being taken to close the loophole that permits the tax-avoidance strategy, one that has been employed by Paulson & Co., among others. By channeling investments through offshore insurance companies, hedge fund managers are able to pay capital-gains taxes, rather than the much higher ordinary income tax.

The IRS has been looking at the matter since 2003. Wyden asked why, after more than a decade, it has “made no progress in ending this kind of tax abuse.”

“I am keenly interested in exploring opportunities to work together to solve this serious issue,” Wyden said.


In Depth

Creating An Offshore Hedge Fund Dream Team: The Seven Key Players

Jun 26 2015 | 6:47am ET

If you want to set up an offshore hedge fund, like any great team, you’re only...

Lifestyle

Hedgies Set to Compete in Wall Street Decathlon

Jun 8 2015 | 12:37am ET

The Wall Street Decathlon — a 10-event physical challenge that will crown “Wall...

Guest Contributor

6 Essential Principles To Balance Your Investment Risk

Jun 26 2015 | 10:07am ET

In this article, financial expert Greg Silberman explores how to hedge a private...

 

Editor's Note