Boxer Manny Pacquiao is currently engaged in big money tax battles with both the IRS and the Philippine government over taxes on his winnings here in the U.S. Tax attorney Rob Wood discusses Pacquiao’s tax struggles in this report and in his Forbes article “Manny Pacquiao Lands $75 Million Blow In Tax Evasion Case.”
Pacquiao has won championships in eight weight classes. His total winnings exceed $300 million. His tax status is unusual in that he is not a U.S. resident or a U.S. citizen. He is a nonresident alien, and as such he does not pay taxes on earnings in other countries. But he owes U.S. income tax on earnings in this country. In addition, he has problems with the Philippine tax authorities.
Wood says it is easy for all of us to underestimate, for an entertainer or athlete, the many things these people have to go through to satisfy all the tax agencies seeking money. In Pacquiao’s case, both countries want more money. In the Philippines, Pacquiao has had some additional problems relating to collection.
Wood explains that people in entertainment or sports have to hire a number of people to do things for them, to keep track of details and see that things are attended to. But these assistants don’t always do things, or do them correctly, putting the stars in the position of having to battle taxing authorities over issues that shouldn’t be issues.
For more information on the subject, please refer to Mr. Wood’s article in Forbes. Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network. The Legal Broadcast Network is a featured network of the Sequence Media Group.