Pacquiao calls allegations of tax deficiencies smear campaign

By Balitang America Staff, ABS-CBN North America Bureau

Dec. 12, 2013

REDWOOD CITY, Calif. – Manny Pacquiao believes there are people who are out to damage his reputation and said reports of his alleged tax deficiencies were crafted by people who want to bring him down.

Pacquiao denied having unfulfilled tax duties in the U.S., worth $18 million in federal income taxes from 2006 to 2010, as reported by celebrity website, TMZ.

The Pacman’s tax troubles with the IRS came just weeks after his fight against Philippine tax officials over $50 million in alleged unpaid taxes. Pacquiao insisted he has paid his taxes properly.

Pacquiao’s promoter Bob Arum and his company, Top Rank Promotions, said the boxing champ has been religiously remitting at least 30% of his taxable income in the U.S. to the IRS. Danny Raval, a tax expert said Pacquiao could still end up owing money, even if he paid his taxes in advance. He explained, “When Pacquiao files for his tax return for that a period, his tax owed gets calculated. If the tax owed is higher than the withheld amount, then he will owe something. When he files his return, he has to pay the tax owed to the IRS.”

Raval pointed out that Pacquiao should not be double taxed in the Philippines. If he paid his tax dues in the U.S., he does not need to pay his tax dues on the same taxable income in the Philippines.

The Philippine Bureau of Internal Revenue claimed Pacquiao still owes at least $50 million in back taxes and penalties. Raval said, “If he paid his taxes here in the U.S., he can apply the tax paid towards his tax owed in the Philippines. That’s considered foreign tax credit. There might be a difference if the tax rate here is 30% and the tax rate in the Philippines is 32%; he might need to pay for the additional 2%. But generally, there’s no double taxation.”

If Pacquiao puts off paying what he supposedly owes in taxes in the U.S., Raval said the IRS will send him letters as reminders until he pays his debt. “If he does not pay, then there will be lien on his properties in America. His bank accounts could also be frozen.”

Raval advised Pacquiao to address the issue right away. He said, “Don’t dwell on it. Send all the necessary and required paperwork to prove you paid your taxes. The more you wait, the more tax penalties you will have to pay.”

The Sarangani representative said he is committed to working with the IRS to resolve any outstanding issues. His adviser, Michael Koncz said, “Manny (Pacquiao) and his financial advisors are handling the situation and have no comment other than to say the disclosure of Manny’s personal tax information is wrong, and the recent stories contain serious errors.”

Koncz added, “We ask that people respect Manny’s privacy and allow the tax process to run its course.”

2 Comments on this post.

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  • Kikay Pang0
    13 December 2013 at 3:01 am - Reply

    Pac is in desperate need of big mega fight to cover his unpaid back taxes.Time is not on his side and FM is the ultimate answer to his misery. Right now , Floyd is not looking for a big pay day and not in the mood to give Bob Arum a satisfaction .

  • Noel Garcia
    13 December 2013 at 12:16 pm - Reply

    To all readers, I recommend that you read the Nov 29, 2013 Phil Daily Inquirer Article by Ms Solita Monsod Title: More more like Trapos; This article is all about Congressman Pacquioa story about his Tax Liabilities of 2,2 Billion pesos with the BIR. It is chronologically specified the facts behind of how and when and why the Tax Liabilities reached to 2.2 Billion pesos. There you can see how Pacquioa cheated the BIR by not acknowledging or responding all the letters or summons that the BIR sending to him. It was intentionally ignored by Pacquioa. Read it and you will get all the facts. Thank you!