Limited Partner Exception Challenged By Hedge Fund Legend

An investment management firm founded and owned by legendary investor (and New York Mets owner) Steve Cohen on August 11 filed a petition in Tax Court contesting an IRS audit adjustment in the amount of $344,063,484 for tax years 2015 and 2016. The adjustment relates to the IRS's assertion that the taxpayer, Point72 Asset Management, LP ("Point72"), incorrectly reported $0 as its net earnings from self-employment. At stake is over $13 million dollars in taxes, not counting interest and any potential penalties.

For the years in dispute, Point72 was owned .01% by Point72 Capital Advisors, Inc. ("Advisors"), an S corporation wholly owned by Mr. Cohen, and 99.99% by Point72 Capital Holdings, LP ("Holdings"), a limited partnership owned .01% by Advisors and 99.99% by Mr. Cohen. The interest in Point72 owned by Advisors was a general partner interest and the interest owned by Holdings was a limited partnership interest. Under Section 1402(a)(13) of the Internal Revenue