After handling his business inside the ring against Timothy Bradley last Saturday in Las Vegas, WBO welterweight boxing champion Manny Pacquiao is set to handle his tax obligations in court, according to his lawyer, Tranquil Salvador, via PhilStar.com's Christina Mendez:
"Cong. Pacquiao has been consistent in saying that he will comply and abide with all the tax requirements of the taxing authorities."
In November, the Associated Press (via ESPN.com) reported that Pacquiao's bank accounts had been frozen by the Bureau of Internal Revenue (BIR) in the Philippines as a result of owed income tax. At that time, it was assessed that Pacquiao owed 2.2 billion pesos in back taxes, the equivalent of $50 million.
According to Mendez, the amount is now closer to 2.65 billion pesos ($60 million) because of interest charges.
Elpidio Barzaga Jr., a representative of Dasmarinas City in Cavite, Philippines, and an accountant-lawyer, believes Pacquiao's tax issues can be resolved with ease, via Mendez:
All that [BIR] Commissioner [Kim] Henares is asking him to do is to submit documents on his earnings and tax payments in the United States. I do not know why his accounting and finance people are finding that hard to do...You cannot earn $20 million there and not pay income tax. The US Internal Revenue Service (IRS) will go after you. Unless Manny’s camp is saying that they did not pay income taxes there.
Dan Rafael of ESPN.com reports that Pacquiao, 35, earned roughly $20 million from his most recent fight with Bradley in Las Vegas. But that money was earned in the United States, which means that Pacquiao should owe income tax in America, as Barzaga points out.
According to Mendez, the IRS has assessed Pacquiao's tax shortfall at $18 million.
Pacquiao (56-5-2, 38 KO), who has been surrounded by talk of retirement since being knocked out by Juan Manuel Marquez in December 2012, is trending up after reeling off two straight unanimous-decision victories in a span of less than six months.
After avenging his 2012 loss to Bradley and reclaiming his WBO welterweight crown, Pacquiao finds himself back among boxing's elite and in the mix for a potential superfight with undefeated five-division champion Floyd Mayweather Jr. (45-0, 26 KO).
It remains to be seen if the two sides will ever agree on a deal. However, there's no question that a Pacquiao-Mayweather matchup would at least temporarily revive boxing and make both fighters vastly richer than they already are.
But before Pacquiao can set his sights on another bout, he'll need to put his tax drama behind him.
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