Tax Partner Howard Barnet Discusses Proposal Increasing New York City Taxes On Hedge Fund Managers

Tax partner Howard J. Barnet, Jr. was quoted in the January 12, 2012 Hedge Fund Law Report article “Proposed New York City Audit Position Can Increase the Amount of Unincorporated Business Tax Paid by New York Hedge Fund Managers.” The article examined a new Proposed Audit Position to be considered by the New York City Department of Finance. Under the proposal, in examining the expenses of hedge funds, the Department of Finance would effectively reallocate many expenses currently claimed by the investment manager to the general partner. The effect would be to increase the operating profits of (New York City-based) investment managers, in turn increasing the amount of New York City Unincorporated Business Tax they would be required to pay. Mr. Barnet commented on the history and scope of the proposal, and offered his view that although the proposal itself would probably not cause hedge fund managers to relocate, its implementation could.

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