IRS The Latest To Send Manny Pacquiao To The Mat: Boxer Reportedly Owes $18 Million
You know, for a guy who seems to be pretty proactive about this tax planning, boxer Manny Pacquiao sure gets hit with some hefty tax bills.
Back in May, we detailed how Pacquiao made the decision to return to the ring in China – where the top marginal tax rate is 12% — rather than the United States – with its newly increased top rate of 39.6% — in order to pocket an extra 28 cents on the dollar of his prize purse.
Then in November, Yahoo Sports reported that Pacquiao’s homeland of the Philippines was in pursuit of the fighter for $50 million in unpaid taxes stemming from income earned in 2008 and 2009. Pacquiao emerged from his corner swinging, claiming that because his income from those years was earned by fighting in the U.S. and he had paid the IRS the appropriate amount of his winnings on his U.S. income tax returns, he owed the Philippine government nothing under the U.S.-Philippines tax treaty that prevents double taxation.
Pacquiao’s response, while impassioned, couldn’t prevent the Philippine government from hitting the boxer below the belt by freezing his bank accounts and levying on his assets. This famously forced one of the Phillipine’s richest citizens to have to borrow funds to contribute to relief efforts after the country was devastated by Super Typhoon Haiyan.
Yesterday, reports emerged on TMZ.com that the IRS is now going for the knockout blow, pursuing Pacquiao for $18 million in unpaid taxes, with $11 million of the debt relating to the very years the pugilist promised the Philippine government he had fully paid his tax obligation to the U.S.
I know Pacquiao is a wealthy guy – he was 14th on Forbes’ list of top-paid athletes in 2013 with earnings of $34 million – but when the government has cut off the ol’ debit card, it can be hard to pay $68 million in unpaid taxes.
My recommendation? It’s time for Pacquiao to think outside the box – or the squared circle, if you will – and go for one last big payday by fighting ten men in a 24-hour period like Honey Roy Palmer did in Diggstown. He could line up some of the best fighters of his generation – Clubber Lang, Soda Popinski, James “The Grim Reaper” Roper and Hammerhead Hagan, to name a few – knock ‘em all down, and rake in enough pay-per-view cash to pay off both of his tax debts and still retire comfortably.
Think about it, Manny.
damn this sucks for Manny
Sig Credit - El Bresko