By all rights, this week’s Tax Day ought to be one of our favorite holidays, like “Christmas in April” without the carols, the eggnog, or the guilt over forgetting a gift for Aunt Mildred. That’s because 80% of us get refunds, averaging $3,011 so far in 2024. (When was the last time Santa Claus left three grand in your stocking?) Of course, that means 20% of us are writing checks to the IRS. And if you’re among that 20%, we sympathize. We know it hurts. But we’re confident it doesn’t hurt nearly as much for you as it does for a hedge fund manager named Ken Griffin.
Griffin started investing during his freshman year at Harvard, when he scored a quick $5,000, betting Home Shopping Network’s price would fall. He started his first fund with $265,000 a year later, after convincing administrators to install a satellite dish on the roof of Cabot House, his dorm, to get stock quotes. Today, he manages Citadel, LLC, a multinational multi-strategy fund with $60-odd billion in assets under management.
Naturally, Griffin finds a way to move much of that money into his pocket. Hedge funds typically charge a 2% management fee. But they also take as much as 20% of their profits, and that’s where the real money is. Last year, Griffin took $2.6 billion for himself. It wasn’t even his best year—in 2010, he took home $5 billion.
Griffin isn’t shy about enjoying his success. He spent $248 million to buy a four-story apartment overlooking Central Park on Manhattan’s Billionaire’s Row. That was the most expensive home sale in U.S. history. Apparently, though, it wasn’t enough. So he spent another $450 million to buy 14 adjoining properties on Palm Beach’s Billionaire’s Row, knocked down most of the houses to create a 27-acre oceanfront lot, and started work on what will eventually become a billion-dollar retirement home. The property tax bill alone is north of $10 million.
What does all that have to do with this year’s tax bill? Well, Griffin gets to take advantage of something called the “carried interest” rule, which lets him treat that $2.6 billion as capital gain. But it still means stroking a check to the IRS for somewhere in the neighborhood of half a billion dollars!
(Who are we kidding here? The IRS can’t even take a check that size. The most they can take in one draft is $99,999,999. Theoretically, he could write five of them. But whose handwriting is small enough to fit “Ninety-nine million, nine-hundred ninety-nine thousand, nine hundred ninety-nine dollars and zero cents” on a check in the first place? He’ll wire the feds the money – and pour himself a really stiff drink.)
It won’t surprise you to learn that Griffin is already in the middle of a beef with the IRS. But it has nothing to do with how much he pays. Back in 2021, an IRS contractor named Charles Littlejohn leaked tax return information from thousands of high-income Americans to expose their (perfectly legal) tax avoidance strategies. Griffin has filed suit against the IRS for unlawful disclosure of his private information and demanded they fix their security problems. (Littlejohn pled guilty to unauthorized disclosure and will be spending the next five years as a guest of Uncle Sam in a place with no billionaires at all.)
We realize you probably aren’t looking at the wrong end of a nine-figure tax bill. But paying more than you have to still stings, no matter how much it is. That’s where we come in. We give you a plan to pay less, no matter which “Billionaire’s Row” you’re living on today. So call us for that plan, and let’s see how much we can help you save!