Financial Firms Face Subpoenas on Tax Strategy
The New York attorney general is investigating whether some of the nation’s
biggest private equity firms have abused a tax strategy in order to slice
hundreds of millions of dollars from their tax bills, according to executives
with direct knowledge of the inquiry. The attorney general, Eric T.
Schneiderman, has subpoenaed more than a dozen firms seeking documents that
would reveal whether they converted certain management fees into fund
investments, which are taxed at a far lower rate than ordinary income.
Among the firms to receive subpoenas are Kohlberg Kravis Roberts & Company, TPG
Capital, Sun Capital Partners, Apollo Global Management, Silver Lake Partners
and Bain Capital, which was founded by Mitt Romney, the Republican nominee for
president.
Executives at some firms said they feared that Mr. Schneiderman, a Democrat with
ties to the Obama administration, was seeking to embarrass the industry because
of Mr. Romney’s roots at Bain. Others suggested the subpoenas might be part of
an effort to recover more tax revenue for New York.
Read More:
http://www.nytimes.com/2012/09/02/business/inquiry-on-tax-strategy-adds-to-scrutiny-of-finance-firms.html?emc=na
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