MIND DA NEWS: An Unsuspecting Victim

GENERAL SANTOS CITY (MindaNews / 12 December) – Poor Manny! Indi unta mapakyaw ang iyang mga milyon. (We hope he will not lose wholesale his millions.) He is pleading innocence which is believable. But, in his ignorance, he can be an unsuspecting victim of deception.

That from 2006 to 2008, he was among the top 10 taxpayers in the Philippines showed his honesty in declaring all his incomes. But in 2009 onward someone among his so-called advisers, including his accountants and lawyers, must have taught him how to manipulate his income tax returns. He was convinced all were legal. So, now, he is telling media he has does not owe the BIR any centavo.

The December 9, 2013 report of TMZ Sports that Pacquiao owes the Internal Revenue Service (IRS) in the United States $18,313,668.79 in “federal income taxes” from 2006 to 2010 – or roughly P805 million (at the Dollar-Peso exchange rate at that time) would shed much light in his tax problems here and in the U.S.

The TMZ Sports report was confirmed to The Philippine Star by Pacquiao’s chief adviser in the US, Mike Koncz, who said that the IRS is “looking at huge tax deductions for Pacquiao for the period in question”. Referring to the figures reported by TMZ Sports, he said, “There is no final assessment yet on the exact amount from the IRS.” It is up to the US tax appeal board to decide whether the deductions were business expenses or not.

What happened in the U.S.? After every fight, Bob Arum, Pacquaio’s promoter, deducted the 32 percent tax from his purse. So he is sure and honest in declaring that he has paid his taxes in the US To Pacquiao, it is as simple as that. But is it really that simple?

In paying to the IRS, Arum’s accountant must have declared “business expenses” of Pacquiao. Not all the 32 percent deducted went to IRS. On close examination, the IRS must have found these “business expenses” bloated. In reality, it is not Pacquiao but Arum who owes IRS $18.3 million – the amount Arum’s company withheld from the 32 percent deducted from Pacquiao’s purse during the five-year period.

Pacquiao trusts Arum. He believes Arum that all his taxes have been paid. This he tells the BIR, showing the letters and sworn statements from Arum. But the BIR people, just like the IRS people in the US, are not naïve. They know how tax returns are manipulated; they have to play the game with the big taxpayers’ accountants and lawyers. The BIR people should not be faulted for demanding certified true copies of Pacquaio’s income tax returns submitted to the IRS?

This brings us to the point. It was reported that Arum had mailed certified true copies of the income tax returns of Pacquiao from the IRS. If as admitted by Koncz Pacquiao’s tax case “is ongoing” in the tax appeals board and he can only guarantee, “We are very confident with our tax lawyers and our accountants,” how could Arum have obtained the “certified true copies” reported as having been mailed to the BIR in the Philippines?

As reported in the Philippine Daily Inquirer, House Minority Leader Ronaldo Zamora was right in advising Pacquiao about the TMZ report: He “should use his earnings to get the best legal and financial advisers to solve his tax problems”.

Pacquiao should stop thinking that like his case in the BIR the TMZ Sports reports “is no doubt part of a demolition job against me.” That he is that big a political figure for “a demotion job” is false assumption. He is an unsuspecting victim of deception. The more seriously he looks into that the better for himself, his family and their future.

[Author’s Note: Mind da News, an alternate of COMMENT, is specifically an opinion on current news. patpdiaz@yahoo.com]

URL: http://www.mindanews.com/mindaviews/2013/12/12/mind-da-news-an-unsuspecting-victim/


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