Manny Pacquiao and the IRS

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To boxing fans, Manny Pacquiao would need no introduction.  He is a Filipino fighter who holds the world’s record for the most world titles across different weight divisions (8).  But the IRS claims he owes them $18 million and they plan to collect when Pacquiao next fights on American soil in what is billed to be the richest fight in boxing history.  The boxing world has been clamoring for a fight between Pacquiao and the undefeated Floyd Mayweather and the two boxers have finally agreed terms and will lock horns in Las Vegas on May 2.

But Pacquiao has another fight on his hands – with the IRS and its Philippines counterpart, the Philippines Bureau of Inland Revenue.  The Philippines government filed a tax evasion case against Pacquiao for $75 million.  This is in addition to the $18.3 million federal tax lien the IRS has lodged against him for allegedly failing to pay taxes for 2006 through 2010.  But Pacquiao claims that a treaty between the US and the Philippines prevents his money from being taxed twice.

Does Pacquiao have a case?  There are indications that he does.  Unlike an ordinary American citizen, Pacquiao does not derive any benefit from the US government from the tax money that he pays.  He does not have a Social Security number, he is not eligible for Medicare or Medicaid, his five children will not money from the US Department of Education to attend school and he does not use any facilities like roads or government infrastructure in the US.  In other words, he pays 39.5% of his earnings as taxes to Uncle Sam simply because he fights in America.

That is the problem Pacquiao faces with taxes.

Check out more Tax News stories by clicking that link.

Law Offices of Darrin T. Mish, P.A.: Tax Attorney

15421 N Florida Ave
Tampa, FL 33613
United States (US)
Phone: (813) 229-7100
Email: contactus@getirshelp.com
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