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IRS Gives Goldman a Bear Hug


It doesn’t rank as high on the outrage-o-meter as those AIG bonuses, but a group of investment funds managed by Goldman Sachs appear to owe more than $80,000 to the taxman.

The Internal Revenue Service has slapped tax liens on five Goldman Sachs funds, including the firm’s North American Equity Opportunities Fund LLC—a one-time $800 million hedge fund that imploded nearly two years ago during the start of the financial crisis. The IRS liens, one of which was filed on March 4, go back as far as last June.

The lien on the North American fund, which Goldman began to wind down in August 2007, is the biggest. On Feb. 10, the IRS filed a lien on the fund for $76,058 in unpaid taxes for 2006 and 2007. The other funds owing back taxes include two so-called “distressed’’ funds that target investments in ailing securities.

Goldman spokesman Michael Duvally says the firm has resolved four of the liens and is “in the process of resolving the fifth.” He wouldn’t say which lien remains outstanding.

Now it’s not unusual for companies or individuals to get involved in a tax dispute with the IRS. Sometimes taxpayers can have legitimate arguments with the IRS over the amount of taxes that are owed on an investment. After a lien is resolved, the IRS files a formal release notice—something that hasn’t happened yet in the case of Goldman.

But the five outstanding tax liens for the Goldman funds would appear to put the firm at the top of this most dubious of league tables. A comparable search of outstanding IRS tax liens found just one for Citigroup, involving unpaid taxes on a company pension plan. Merrill Lynch, now part of Bank of America, also has one unresolved IRS lien. Even AIG, the Wall Street bad boy of the moment, has just one outstanding tax lien—a federal lien on its savings bank.

Now we know times are tough on Wall Street, but it would seem the folks at Goldman could scrape together a few bucks to pay-off the firm’s tax bill. After all, it was only last month that Goldman CFO David Viniar said the firm would like to repay the $10 billion in federal aid the firm got as soon as possible.


Steve Ballmer, Power Forward
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