A federal court ruling that would force former principals of Long-Term Capital Management to pay in excess of $40 million in back taxes is sending shockwaves across the hedge fund industry where compliance rule books are being rewritten.
Industry players say they are anticipating increased pressure on hedge funds, their legal advisors and auditing firms when it comes to developing and implementing best practices for tax compliance. The fear is a renewed I.R.S. blitz to stomp out transaction and reporting practices that are perceived by regulators to be abusive tax shelters.
In a move that clearly paints a bullseye on