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IRS Issues New Rule Regarding Hedge Fund Fees

irs_logoNew York (HedgeCo.Net) – The IRS is backing investors who want to change the amount of fees a hedge fund firm can charge.

By issuing a new rule reducing the incentive fees assessed by hedge funds for institutional investors, the sector may begin to invest into the hedge fund industry at a lower cost.

Bloomberg reports: “The ruling, 2014-18, clarifies that hedge funds can charge incentive fees cumulatively rather than annually without running afoul of a tax law change adopted in 2008. These fees, typically equaling 15 percent to 20 percent of an investor’s profits, comprise a big portion of a hedge-fund manager’s annual revenue.”

The IRS also today announced the adoption of a “Taxpayer Bill of Rights” that will provide US taxpayers with a better understanding of their rights. The the new bill takes the multiple existing rights embedded in the tax code and groups them into 10 broad categories.

Alex Akesson
For HedgeCo.net
alex@hedgeco.net
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