Pacquiao leaves for US to tackle tax woes

Manny Pacquiao will soon leave for the US — not to train for his next fight but to tie up some loose ends with the IRS.

The Filipino slugger who recently lost to Mexico’s Erik Morales at the MGM Grand in Las Vegas yesterday said he’s leaving before April 15 for a meeting with officials of the US Internal Revenue Service.

"Aayusin ko na. ‘Yon ang ipupunta ko sa America. Para ayusin ang problemang ‘yan," said the 26-year-old Pacquiao after reports came out that he had been remiss in paying his taxes to the US government.

He has neither confirmed nor denied that this is the case.

Pacquiao has fought seven fights in the US since 2001. These were against Lehlo Ledwaba, Agapito Sanchez, Jorge Julio, Emmanuel Lucero, Marco Antonio Barrera, Juan Manuel Marquez and Morales.

Pacquiao has earned millions of dollars in these fights, the biggest of which was the latest one where he drew a purse of $1.75 million, the most ever received by a Filipino athlete in any single sporting event.

But apparently or allegedly, Pacquiao had been remiss in paying his taxes for his previous fights.

The IRS, according to Pacquiao’s lawyer, American Keith Davidson, even threatened to withhold his entire $1.75 million purse even before the fight against Morales was staged before a jampacked MGM Grand Arena.

However, Pacquiao’s willingness to sit it out with the IRS, Davidson added, made the dreaded agency decide to deduct from Pacquiao only 30 percent or $525,000 of the total purse.

Boxers fighting in the US are taxed by the IRS 30 percent of their purse at the end of the fiscal year.

Pacquiao, a source said, was to get 50 percent of the purse. He said another 25 percent should go to American manager Shelly Finkel and 10 percent to American trainer Freddie Roach. But whether they will come from the gross purse or after the taxes are deducted he couldn’t say.

A bigger group of persons will settle for the rest of the purse. They are the lawyers, training and sparring partners, assistant trainers, conditioning coach, liaison officer, drivers and even some hangers-on.

Murad Muhammad, Pacquiao’s American promoter, also made a fortune courtesy of the pay-per-view shares, which Pacquiao said he should have been entitled to.

An internet article has tried to put the blame on Muhammad and Rod Nazario, who is Pacquiao’s business manager. Nazario is still in the US, staying on after the March 19 bout, and is scheduled to be back in Manila in two weeks.