NYC Focuses on Hedge Funds in Tax Audits of Carried Interest 

New York City is ramping up audits of hedge funds, scrutinizing how firms allocate income and expenses tied to carried interest as part of a broader push to boost tax revenue. Hodgson Russ Partner Timothy Noonan was quoted describing the city’s approach as a notable shift, explaining that auditors may be using expense reallocation as a “backdoor” attempt to reach income that has historically remained outside the tax base. His comments highlight both the evolving enforcement strategy and the potential financial stakes for affected firms.

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