Pacquiao owes US tax agency $18M — TMZ report

Now the US taxman has entered the ring to chase Manny Pacquiao, according to celebrity news website TMZ. 

"The IRS (Internal Revenue Service) claims Manny stiffed the (US) government out of federal income taxes from 2006 to 2010... totaling $18,313,668.79 in debt," TMZ has reported, adding that it has "obtained official documents" on the matter. Pacquiao's lawyer has denied there is a US tax case.

TMZ  did not post its purported copies of the IRS documents on their website. GMA News Online could not find the documents on the IRS website.

"We deny. We have no knowledge of the so-called IRS tax deficiency case. There is no such case," Tranquil Salvador, Pacquiao's lawyer, said in a text message to GMA News Online.

Partly owned by Time Warner Inc. and based in the US, TMZ has broken numerous major celebrity stories, notably the death of Michael Jackson, hours ahead of mainstream media, and the assault of Rihanna by her then partner.

Pacquiao is in the midst of a court battle in the Philippines with the Bureau of Internal Revenue, which has accused Pacquiao of not submitting sufficient US tax documents that would prove that he paid income taxes in the US.

US income taxes would be deducted from taxes Pacquiao owes in the Philippines under the terms of a tax treaty between the two countries.

BIR Commmissioner Kim Henares has said that, based on his tax returns, Pacquiao did not declare US income in 2009, when he won two fights, against Ricky Hatton and Miguel Cotto. Yet Pacquiao in the same year was named the 14th highest paid athlete in the world by Forbes magazine.

 

According to TMZ, Pacquiao's tax liabilities are 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

 

Last month, shortly after a dramatic comeback victory against American Brandon Rios in Macau, Pacquiao bared in a surprise press conference that some of his bank accounts were seized by the BIR. 

 

Since 2012, the BIR has been running after the world boxing champion and congressman for P2.2-billion ($50 million) in tax deficiencies in 2008 to 2009. 

 

Pacquiao, however, disputed the bureau's allegations, saying he paid taxes on earnings from boxing matches in the US during those years. 

 

Top Rank CEO Bob Arum, who is Pacquiao's promoter, has stood firm that the boxer has religiously paid taxes in the US.

Pacquiao and his wife Jinkee have filed a complaint in the Court of Tax Appeals in the Philippines challenging the BIR's tax claims.

 

Last week, the court issued a gag order on both Pacquiao and the BIR so they would stop arguing in public about the case. A Jan. 16, 2014 hearing was set for the BIR to present counter-evidence.

Meanwhile, a bill has been filed in Congress proposing a lifetime tax exemption for the champ, but it would not apply retroactively. Even if passed into law, the exemption would not solve Pacquiao's current tax troubles. And it would have no effect on his earnings in the United States. – Siegfrid Alegado/Danessa Rivera/VS/HS, GMA News