SAN DIEGO, March 11, 2012 ? Manny Pacquiao is far more than a boxer in the Philippines. He is a politician with ambitions of running for President someday. He is the star of action movies, and a singer. His product endorsements carry enormous weight with his fans. He is one of the world?s top earning athletes.
Is he also a tax scofflaw? Or the target of political enemies? Will he now have something in common with his longtime rival Floyd Mayweather: a criminal record?
Officials from the Philippines Bureau of Internal Revenue (BIR), the equivalent of the American Internal Revenue Service, have filed a criminal complaint against Pacquiao after he reportedly failed to product documents to investigators clearing up allegation of discrepancies in his 2010 tax returns.
In an interview on Philippines radio station dzMM, BIR commissioner Kim Henares said Pacquiao had long ignored repeated requests for copies of his contracts, and that the bureau was forced to sue him. The BIR wants to investigate 33 tax records having to do with Pacquiao?s annual income for 2010. Henares said the BIR grew interested after seeing Pacquiao?s tax payments drop significantly from 2008 to 2009. The BIR also wants to see copies of 29 different advertising and endorsement contracts.
?We have filed a criminal case against Congressman Emmanuel Pacquiao for violation of Article 266 of the National Internal Revenue Code,? said Henares. “We haven’t reached to the point that he is evading taxes. We are asking him for copies of his contracts to different companies, which he has not given or has refused to give.”
Pacquaio says he will cooperate and comply, but needs more time to submit the records. Pacquiao said there could have been some miscommunication or an honest error on the part of his staff and stressed he has no intention of violating any BIR regulation.
?I already sent a staff member to the BIR office. But if they (BIR officials) saw something wrong, I wish they would give us enough time to correct it,? Pacquiao told GMA-7 television news in the Philippines.
“How much more time does he need?” Henares told ABS-CBN News. Henares said it was premature to discuss whether an actual criminal case would be filed against Pacquiao.
There have been rumors for years that Pacquiao has financial problems, despite earning $400 million from pay-per-view fees alone during his career. Pacquiao wouldn?t be the first athlete to run through a great deal of money, or to have trusted less than reliable accountants and advisors.
Pacquiao is reportedly the single biggest tax filer in the nation, and therefore a huge target. He is not in favor with current President Benigno ?Noynoy? Aquino III due to his allegiance to former President Gloria Arroyo. There is a perception that the Aquino government is vindictive. Funding for his proposed hospital project in his home province of Sarangani has dried up, and he is having a hard time securing the P200 million needed.
In October 2011, TMZ.com reported that Pacquiao?s former accounting firm had sued the fighter for payment of nearly $650,000 after it got him out of an accounting jam last year. The firm claimed it had to lend Pacquiao money to facilitate the proceedings.
This happened just prior to Pacquiao?s bout with Juan Manuel Marquez, a fight he barely won and many think that he lost. In the HBO documentary ?On Freddie Roach,? Pacquiao?s trainer admitted after the fight that Manny?s head was ?somewhere else? and that his fighter simply wasn?t in the game. Was he distracted by his financial problems and political problems?
Pacquiao cannot afford to let these distractions affect his upcoming June 9 fight with Timothy Bradley. Bradley is not a pushover in any sense and cannot be taken lightly. If he was distracted enough to nearly lose to Marquez, Pacquiao needs to clean up these tax issues and fast. His mind cannot be anywhere other than in the ring at the MGM Grand on June 9.
That same evening, his long time nemesis Floyd Mayweather will be sleeping just a few miles away in a Clark County, Nevada jail cell for the ninth night of an 87-day delayed jail sentence for domestic violence. Mayweather?s situation complicated any possible agreement for a long hoped-for ?fight of the century? between Mayweather and Pacquiao.
Could Pacquaio possibly be joining Mayweather?
This situation could be much ado about nothing, a mere paperwork issue made into a big deal because it involves a big name celebrity athlete and politician. But it bears watching, especially as Pacquiao?s fight with Bradley approaches.
While the IRS sent Al Capone to prison, apparently the BIR has never sent a single person to prison in the Philippines for tax evasion. It is hard to believe Pacquiao would be the first person in Muntinlupa, the Philippine Alcatraz, for cheating on his taxes.
