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article imageOp-Ed: Who's telling the truth on Manny Pacquiao's tax woes?

By Leo Reyes     Dec 11, 2013 in Sports
Manny Pacquiao's promoter Bob Arum says his company, Top Rank Promotions has been religiously remitting at least 30% of Pacquiao's taxable income in the US to the Internal Revenue Service (IRS) but a TMZ report says Pacquiao still owes IRS $18 million.
In the Philippines, the Bureau of Internal Revenue (BIR) says the Filipino boxing star still owes the government at least $50 million in back taxes and penalties.
The Philippines and the US has an agreement that if a taxpayer pays his tax dues in the US, he need not pay his tax dues on the same taxable income in the Philippines.
“Filipino authorities confirmed that Manny is not required to pay double tax,” Arum said in a statement last Tuesday (Wednesday in Manila). “If Manny paid US taxes for fights and endorsements that occurred on US soil, he is not required to pay double taxes in the Philippines.”
Arum said his company (Top Rank) has withheld 30 percent from Pacquiao's income in the US every time he fights there and remitted the same to the IRS.
But TMZ reported Tuesday that it has obtained documents that show Pacquiao owes IRS at least $18,313,668.79, broken down as follows:
2006 -- $1,160,324.30
2007 -- $2,035,992.50
2008 -- $2,862,437.11
2009 -- $8,022,915.87
2010 -- $4,231,999.01
If Arum has in his possession the same documents that TMZ obtained and used as a source in releasing Pacquiao's tax dues from 2006 to 2010, he has to either confirm or deny it and come up with credible explanation.
Both IRS and BIR have indicated possible flaws in Pacquiao's tax returns as shown in the yearly figures disclosed by TMZ in the case of IRS and in the $50 million assessment in the case of BIR.
Arum and Pacquiao are both claiming that correct taxes have been remitted to the IRS but the BIR has yet to receive original or certified copies of Pacquiao's returns.
Who is now lying and who is telling the truth in the wake of this seemingly damning disclosure by TMZ?
In order to resolve Pacquiao's tax issues both in the US and in the Philippines, a truthful and honest disclosure of Pacquiao's tax arrears must be made by IRS on Pacquiao's taxable income including endorsements fees contracted in the US.
If it will reveal that Top Rank has withheld 30 percent of these fees and failed to remit the same to the IRS, then Pacquiao should not be blamed for the fiasco and let Arum suffer the consequences of his actions.
In the case of Pacquiao's tax liabilities in the Philippines, a payment compromise can be arranged with the BIR commissioner to give Pacquiao a clean bill of health in so far as tax issues are concerned. After all he has done so much in bringing respect and honor to the country.
Still, the IRS must put closure on Pacquiao's tax woes in the US as the resulting fees or amount of final tax paid, will be used as basis for the determination of his tax dues in the country.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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