US tax woes caused Pacman’s PH tax woes?-A A +A
Friday, December 13, 2013
FILIPINO boxing icon Manny Pacquiao’s recent fight against American Brandon Rios was held in Macau, China.
This was a departure from tradition considering that Pacquiao fought mainly in the United States, usually in Las Vegas, during his great run from 2001, when he shot to world fame by beating Lehlo Ledwaba, until 2012, when he was viciously knocked out by Mexican Juan Manuel Marquez in their fourth fight.
One of the reasons advanced re: change of venue by Pacquiao’s promoter Bob Arum and Top Rank was that they were tapping the big China market and that Manny didn’t want to pay the astronomical taxes the US government collects from his fights.
It now looks like the latter reason is the more compelling one. Pacman seems to have problems with the US Internal Revenue Service (IRS). And this problem seems to be tied up to his tax woes here in the Philippines courtesy of an unflinching Bureau of Internal Revenue (BIR).
After the website TMZ.com ran a story claiming that Pacquiao has tax liabilities in the US from 2006 to 2010 to the tune of $18 million, more blogs and websites are putting context to the story. This makes Pacman’s immediate denial more of an effort
to douse cold water on a fire that is starting to rage.
Fighthype.com writer Ben Thompson, in an article posted yesterday titled “Manny Pacquiao Denies Owing $18 Million; Michael Koncz Says ‘The Issue’ Being Discussed with IRS,” recounted a press release issued in 2011 by VisionQwest (VQ), the accounting firm that Manny hired in 2010 to straighten out his finances in the US. A portion of the p.r. said:
“Prior to 2010, Manny Pacquiao (‘Manny’) and MP Promotions USA, Inc. (‘MP’) never had a full accountant or a bookkeeper, and did not have a fulltime accounting firm.
Michael Koncz is the business advisor of both Manny and MP and he has no accounting degree or training, yet he is in charge of their finances. For every year, before Manny and MP hired VQ for their accounting needs, they would hire different accountants who simply plugged in numbers supplied by Michael Koncz into the taxation forms and filed them with the IRS, without any backup or reconciliation. Due to this mode of operation on the part of Michael Koncz, Manny and MP had suits issued against
them for at least two prior years (2006, 2007).”
That press release was issued when Pacman’s relationship with VisionQwest had soured, resulting in the Filipino boxer hiring another accounting firm, identified as Tanner, Mainstain, Blatt, Glynn & Johnson about a year later.
The Ring writer Lem Satterfield wrote (in 2012) that Pacquiao’s US-based lawyer Dan Petrocelli had alleged that VisionQwest itself made “numerous errors” on tax returns and gave “substandard accounting and tax advice.” Worse, he accused VQ of holding on to Pacquiao’s tax records.
Now, it may not be mere coincidence that Pacquiao’s tax payments questioned by BIR involved the years prior to 2010, and that Pacman is finding difficulty presenting his tax records for that period. VisionQwest had sued Paquiao for breach of contract when Petrocelli made that statement, so it’s possible VQ still has Manny’s tax records.
Incidentally Koncz, when interviewed, didn’t deny that the Pacman owes money to the IRS but said the amount is smaller. This was the same line of Manny’s other US-based lawyer, Steven Toscher, in an e-mail to RingTV.com, which sought his reaction to the TMZ.com story. Here’s what Toscher said in the article Satterfield posted yesterday:
"Manny and his financial advisors are handling the situation and have no comment other than to say the disclosure of Manny's personal tax information is wrong, the recent stories contain serious errors, and Manny is committed to working with the IRS to resolve any outstanding issues.”
Published in the Sun.Star Cebu newspaper on December 13, 2013.