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Filipino boxer Pacquiao denies he owes IRS $18m

Publication Date : 12-12-2013


Eight-division boxing champion Manny Pacquiao on Wednesday said the reports that he owed more than US$18 million in taxes in the United States were the handiwork of people out to destroy him.

“This is no doubt part of a demolition job against me,” Pacquiao, who holds the seat of Sarangani in the House of Representatives, told the Inquirer on the phone.

“It’s not true I owe the [US Internal Revenue Service] $18 million in back taxes,” Pacquiao said.

Pacquiao, who is slugging it out with the Bureau of Internal Revenue (BIR) to keep for himself 2.2 billion pesos ($50 million) that the tax collection agency claims he owes the government in back taxes, noted that only days ago a report came out that he was a green card holder.

“[That’s] meant to discredit me,” he said. “I’m not a green card holder.”

On December 10, the celebrity news website TMZ reported that Pacquiao owed the IRS $18,313,668.79 in back taxes for five years.
Broken down by year, TMZ said, Pacquiao’s tax liability is $1,160,324.30 for 2006; $2,035,992.50 for 2007; $2,862,437.11 for 2008; $8,022,915.87 for 2009; and $4,231,999.01 for 2010.

TMZ said the figures were based on official documents it had obtained, but did not publish.

Partly owned by Time Warner and based in the United States, TMZ has broken major celebrity stories, including the death of pop king Michael Jackson on June 25, 2009, hours ahead of mainstream news outlets, and the assault on R&B singer Rihanna by her boyfriend Chris Brown on Feb 7, 2009.

Pacquiao fought 12 fights between 2006 and 2010, including the megabuck bout against Mexican-American Oscar de la Hoya in 2008 for which he pocketed a guaranteed purse of $11 million and another $11.2 million in pay-per-view buys.

But Pacquiao said he had paid taxes on all of his earnings from those fights.

No way to run
“How can that be?” he asked, referring to the report about his supposed tax liability. “Top Rank Promotions is deducting IRS taxes automatically before giving or releasing my purse. In the US, taxes are immediately deducted from your income.”

Pacquiao said there was no way he could have missed paying taxes on his US earnings.

“Even before I could climb the ring, right inside my dressing room, IRS people are already waiting. So how can I escape from paying my taxes?” Pacquiao said.

He said Top Rank big boss Bob Arum had already taken appropriate action in the United States to clarify matters.

“Bob Arum had already issued statements in the US to set the record straight. I’m confident this issue will be cleared up,” Pacquiao said.

On his website Pacland, the champ said he saw a pattern in all the “lies” being thrown at him.

He could not say, however, who were behind the attempt to discredit him.

He told the Inquirer that he was taking the TMZ report as another challenge, a test of his newfound Christian faith.

“When God and truth are on your side, who can put you down?” Pacquiao said. “I know these are all part of the test to gauge the strength of my faith in Him.”

BIR Commissioner Kim Henares thinks Pacquiao’s new challenge could be “gossip.”

“The reports were based on entertainment news. It could be just gossip,” Henares told the Inquirer by phone.

She said the IRS had not informed the BIR that it is running after Pacquiao for unpaid taxes.

The IRS, however, has no obligation to inform the BIR that it is going after Filipinos who owe back taxes in the United States, Henares said.
In the same way, she said, the BIR has no obligation to inform the IRS that it is running after Americans who have unpaid taxes in the Philippines.

Henares said earlier that Pacquiao was in the top 10 per cent of highest tax payers from 2006 to 2008, but he slid to the top 30 per cent in 2009.

It was in 2009 that Pacquiao made it to Forbes magazine’s list of the world’s highest-paid athletes, ranking sixth with estimated earnings of $40 million from June 2008 to June 2009.

A BIR audit of Pacquiao’s tax returns for 2008 and 2009 led to the discovery of his supposed 2.2 billion pesos in tax liabilities in the Philippines.

Pacquiao disputed the BIR findings, leading to litigation and a freeze on the boxing champion’s bank accounts.

The two sides are discussing a settlement, but the Court of Tax Appeals has ordered them to stop talking publicly about the controversy.

Get best advisers
House Minority Leader Ronaldo Zamora told reporters on Wednesday that he had spoken to Pacquiao about the TMZ report.

“He says he doesn’t owe the US government any taxes,” Zamora said.
He said Pacquiao should use his earnings to get the best legal and financial advisers to solve his tax problems.

“If he’s able to do that, then many of his problems will disappear,” Zamora said.—With reports from Michelle V. Remo, Leila B. Salaverria and Ana Roa, Inquirer Research


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