John Paulson, one of the most prominent hedge-fund managers, reportedly owes one of the largest-ever personal tax bills this year.
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Paulson must pay $1 billion in federal and state taxes by April 17, according to The Wall Street Journal. The report, citing sources close to Paulson & Co., noted that the 62-year-old already paid $500 million in taxes late last year.
The massive tax bills are tied to bets Paulson made against subprime mortgages before the 2008 financial crisis. The timely investments generated a reported $15 billion in profits for Paulson’s funds and $4 billion for himself. Paulson deferred most of the taxes on those profits under a provision used by hedge-fund managers, but the tax bill has come due.
The Wall Street Journal said Paulson declined to be interviewed.
Paulson & Co.’s assets under management have dipped to $9 billion from a peak of $38 billion, according to the report. The Journal also said the hedge fund has sold some of its stake in Caesars Entertainment and other investments in order for Paulson to withdraw money.
It remains unclear how Paulson will pay his taxes. He could send the money by check, but it would take multiple checks to pay the full bill. The IRS only accepts checks or money orders of less than $100 million.