(Bloomberg) -- Senate Finance Committee Chairman Ron Wyden is targeting Anthony Scaramucci’s hedge fund SkyBridge Capital, accounting firm Baker Tilly and others in an investigation into whether Opportunity Zones investments are benefitting low-income areas as intended.
Wyden sent letters Thursday to several organizations that have invested in Opportunity Zones -- low-income areas where investors can qualify for large capital-gains tax breaks for providing funds for real estate and business. In addition to SkyBridge Capital and Baker Tilly, Wyden also sent to Cresset Partners, Hatteras Sky, PTM Partners, Related Group and Shopoff Realty Investments.
“I have long been concerned that the Opportunity Zone program may permit wealthy investors another opportunity to avoid billions of dollars in taxes without meaningfully benefitting the distressed communities the program was intended to help,” Wyden, an Oregon Democrat, said in the letter.
IRS data through 2019 showed that more than 6,000 funds reported holding about $29 billion in qualified property under the program.
Wyden said he is worried that the Opportunity Zones, which were created in the 2017 Republican tax law, aren’t helping struggling communities develop, but rather funding luxury real estate projects -- including a yacht marina in Palm Beach, Florida, and a Ritz Carlton hotel in Portland, Oregon.
The Senate Finance chief is proposing to add transparency requirements for investors to demonstrate the benefit they are providing to the low-income communities to qualify for tax breaks.
A Government Accountability Office report from October found that some investments in Opportunity Zones would have happened even without the incentive. The federal watchdog also recommended that the Internal Revenue Service develop safeguards to make sure wealthy taxpayers didn’t abuse the tax break.
Wyden requested that the recipients of the letter respond to his questions about their Opportunity Zone projects by Feb. 3.
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