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article imageOp-Ed: Manny Pacquiao next fight purse not enough to pay US tax dues

By Leo Reyes     Dec 11, 2013 in Sports
If Manny Pacquiao gets $18 million — the same amount he was reportedly paid by his promoter when he fought Brandon Rios in Macau — it won't be enough to settle his tax obligations with the US Internal Revenue Service (IRS).
That is of course if his tax liability of $18,313,668.79 with the IRS is true, as reported by TMZ last Tuesday. TMZ claims it obtained documents that show Pacquiao owes IRS the said amount.
Granting that Pacquiao gets a little more than his previous fight purse, say $20 million, still it won't be enough to settle his tax dues in the US alone.
If he fights in the US on April 12 as his promoter announced right after the Rios fight in Macau, the IRS will deduct 30 percent from his purse as payment for US tax, leaving him with only $14 million net of tax.
From his $14 million pretax income on his upcoming fight, Pacquiao will have to take out his operating expenses like salaries and wages of his trainers and members of his camp. He would be lucky if he makes $10 million clean.
Pacquiao gets extra income with his pay-per-view (PPV) share which is quite substantial. Still this sum will likewise be subjected to the 30 percent deduction by IRS. But even if he nets $5 million on PPV receipts, he would still need at least $3 million to put closure on the IRS dues.
Still, Pacquiao needs to settle his tax dues in the Philippines which the BIR said would run to about $50 million including penalties and surcharges.
Granting that he can reach a compromise deal with BIR and cut his tax dues to say $15 million after the necessary adjustments as a result of his final settlement of his US tax dues, he needs to return to the ring again in order to wipe out his tax obligations.
Fighting twice and putting his life on the line just to pay off his tax dues is just too much for Pacquiao to bear. Seemingly, his trusted friends and the people handling his finances have been remiss in their assigned tasks or they don't care at all so long as they get their share of the pot.
Critics say Pacquiao is partly to blame for his financial fiasco by trusting people with vested interests who usually take advantage of him being a naturally kind and accommodating person.
During his first visit to congress Tuesday after having been absent for over two months to train for his fight against Rios, one of his colleagues advised him to hire good, honest and experienced accountants and lawyers to handle his financial and legal concerns.
A radical suggestion from a popular media personality who has known Pacquiao for many years and who considers him like a brother, calls for a total revamp of Team Pacquiao, particularly those who are handling Pacquiao's legal and financial concerns.
With the raging tax and other financial issues that clearly threatens Pacquiao's future as an aspiring political leader, the suggested radical revamp of Team Pacquiao is in order and should be pursued vigorously in consultation with his journalist-friend being referred to in this article.
Seemingly, Pacquiao is receptive to the idea and advice of his congressional colleague about hiring dependable accountants and lawyers who can shield him from future problems concerning financial, legal and tax issues.
Hopefully Pacquiao will sit down and listen to his journalist-friend who has been reaching out to him on Facebook to mend his ways and listen to the advice of people without vested interest and hidden agenda.
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
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