Pacquiao Watch: The taxman comethBy Edwin Espejo Dec 11, 2013 9:05AM UTC
Is the glass tower slowly crumbling?
A report is out that the Internal Revenue Service of the US is after all after Manny Pacquiao for tax deficiency to the tune of US$18.3 million covering the period between 2006 and 2010.
The IRS is the counterpart of the Philippines’ revenue body – the Bureau of Internal Revenue (BIR).
TMZ, a popular TV show in the US covering the lives of Hollywood celebrities and political personalities, said it has obtained documents to prove that Pacquiao’s camp failed to fully settle the Filipino’s tax obligations in the US despite lucrative purses he got from marquee fights during the period covered by the IRS levy.
This report does not include the P2.2 billion (US$50 billion) that the BIR has been seeking from him for years 2009 and 2010 alone.
The report is contrary to the statement issued by Bob Arum of Top Rank, Pacquiao’s promoter, that the Filipino’s tax obligations in the US have already been paid.
But when reached Mike Koncz, described by Arum as Pacquiao’s financial adviser, said everything has been taken care of.
“Everything is fine,” he briefly said before hanging the phone.
Koncz used to handle Pacquiao’s finances in the US before he was eased out following the entry of Vision Quest as the Filipino fighting congressman’s accounting firm in the US.
Vision Quest however was fired after it insisted on getting copies of the fight contracts of Pacquiao from Top Rank, including proceeds from his PPV fights.
Koncz is now back as Pacquiao’s trusted adviser.
An hour after the first call, however, Koncz called back to clarify the report that came out in TMZ.
He said the US$18 million being sought by the IRS is for the deductions that the US revenue body has reportedly disallowed.
“This is now being handled by our lawyers in America. This is not something new that happened yesterday. We have been discussing this issue with the IRS during the last 3 years,” Koncz said.
Koncz did not specify which expenses were disallowed by the IRS.
He added that there may be some that will be disallowed but not as high as US$18 million.
He clarified that the IRS issue is entirely different situation from the case pending before the Court of Tax Appeals in the Philippines.
The Sarangani congressman’s long time lawyer, Franklin Gacal Jr, recently suffered a massive stroke and was not available for interview for medical reasons. Gacal handled all fight contracts of Pacquiao since the two bosom friends teamed up in the early 2000s.
After his rousing win over Brandon Rios in Macau on November 24, Pacquiao complained that he cannot withdraw money to donate to the victims of Typhoon Yolanda (Haiyan) in Leyte after the BIR tarnished his bank accounts.
BIR Commissioner Kim Henares, however, said they were only able to take P1.1 million (US$24,875) from Pacquio’s known bank accounts.
A case is now pending before the Court of Tax Appeals which recently issued a gag order for both parties.
Pacquiao heas earned more than US$100 million in purse money, PPV sales and other sources over the last 10 years, making him the richest member of the Philippine House of Representatives.
He used his wealth and stature as a boxing icon to win a seat in Congress representing the lone district of Sarangani, home province of his wife Jinkee.
His camp has called the BIR move political harassment.
Pacquiao campaigned for former Senator Manny Villar in the 2010 presidential elections which was won by President Benigno Aquino III.
Pacquiao has since aligned himself with Vice President Jejomar Binay, a strong opponent of Aquino ally and interior secretary Mar Roxas, in the 2016 elections.
Which leads us to ask, are Pacquiao’s financial woes being used against him to cut short any presidential ambition he may have and to clip his influence in the 2016 presidential derby?
If Pacquiao continues to box and runs for Senator in 2016, he could be a formidable campaigner for Binay. Not to mention a possible running mate if the age limitation for presidential and vice presidential candidates is reduced to 35 from 40.
Or has Pacquiao really squandered (or been fleeced of) all his earnings?
Will Pacquiao go Joe Louis’ way – barely surviving during retirement and becoming a club bouncer after losing his winnings?
Pacquiao has been warned and offered advice. It is for him to get his house in order.