Current and former executives of hedge fund Renaissance Technologies will personally pay as much as $7bn in back taxes, interest and penalties to settle a long-running dispute with the Internal Revenue Service, the firm said, a tax settlement that may be the largest in history.

James Simons — the quantitative-investing pioneer who started Renaissance before retiring as the firm’s chairman on 1 January — will make an additional “settlement payment” of $670m, according to the firm. Simons will also pay back taxes related to his gains.