Billionaire New York Mets owner Steven Cohen is fighting an IRS assessment of $7 million to $10 million on earnings at his Point72 Asset Management hedge fund in 2015 and 2016, Bloomberg reports.

As a limited partnership that only invested assets of Cohen and members of his firm in those two years, Point72 passed income directly to Cohen and the other owners. Cohen paid income taxes on his $344 million in earnings in those two years, people familiar with the matter said.

Point72, which is now managing outside assets, petitioned the U.S. Tax Court on Aug. 11 to challenge the assessment. The assessment includes a 15.3% self-employment tax (12.4% for Social Security and 2.9% for Medicare) that a 69-year-old law in the tax revenue code has exempted limited partners from paying.

In the years in question, Cohen's Social Security tax was capped at $118,500.

The Point72 petition calls the IRS's assessments "erroneous, unreasonable, arbitrary and capricious."

Anthony Daddino, a managing partner with Meadows Collier, which specializes in tax law, says that if the IRS prevails in the Point72 case, the "ongoing charge year after year after year will be a meaningful drain," not just for Cohen and but also for other limited partnership money managers.

Since 2018, the Internal Revenue Service has been challenging whether owners in limited partnership asset firms are passive investors or actively managing the companies.

It appears that the IRS has audited hundreds of asset management limited partnerships in the past five years, says Miri Forster, a tax partner at Eisner Advisory Group.