According to reports out of the Philippines, the Bureau of Internal Revenue (BIR) has filed criminal charges against 8-division world champion and Congressman Manny Pacquiao for violating the National Internal Revenue Code. For those that don't know, the BIR is the Internal Revenue collecting arm of the Philippine Government, essentially their version of the IRS. According to Bureau of Internal Revenue commissioner Kim Henares, Pacquiao's tax payments have significantly decreased over the years despite a steady increase in his earnings. Evidently, Pacquiao had some explaining to do, but instead, chose to ignore requests made by the BIR for copies of his contracts.



"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," BIR regional director Rozil Lozares explained. According to ABS-CBN news, the BIR wants to investigate 33 tax records, including Pacquiao's annual income tax return in 2010, his book of accounts, list of assets, as well as his earnings from his fights against Antonio Margarito and Joshua Clottey. The agency also asked him to produce 29 copies of his contracts for endorsements (it should be noted that Top Rank Promotions took over control of Pacquiao's endorsement deals in March of last year). Pacquiao was sent a subpoena on January 24 requesting him to appear at the regional office on February 7 with the necessary documentation. When he failed to do so, the BIR filed the contempt charges.



Naturally, Pacquiao denies any wrongdoing. "I am not hiding anything," he explained when the news broke. "Everything that I have to pay has been paid." It should be interesting to see how this matter is handled by the Los Angeles-based accounting firm Tanner, Mainstain, Blatt and Glynn, which was handpicked by Pacquiao's adviser Michael Koncz to review Pacquiao's tax returns regarding refunds due and to audit the records of his promoter, Top Rank Promotions. Originally, Pacquiao had enlisted the services of VisionQwest Resources Group, a company with offices in the Philippines that was brought in to review his business contracts dating back to 2005 to ensure that all of his accounting, both business and personal, were in order and resolve any tax issues. However, when VisionQwest discovered what they called "inconsistencies in reporting and documentation" by Top Rank, there services were mysteriously terminated.



VisionQwest would later send out a press release that had some very surprising details about Pacquiao's financial situation. Evidently, up until VisionQwest was hired in 2010, Pacquiao's taxes were handled by several different accountants who "simply plugged in numbers supplied by Michael Koncz into the taxation forms and filed them with the IRS". In fact, it was revealed that Paquiao had no true knowledge of his financial worth, missing a number of key documents, including "bout contracts, bank statements, bout proceed distributions, endorsement contracts, promoter contracts, co-promoter contracts, and property ownership records" to name a few. That might explain why he was unable to appear before the BIR in February. VisionQwest's staff discovered "various accounting issues" and became concerned with a number of questions that went unanswered. They became even more concerned when they discovered "ridiculous amounts of money" being paid to Michael Koncz and, according to the press release, discovered that he was working on behalf of Top Rank, as well as Pacquiao. Unforutnately, VisionQwest never had an opportunity to present their information to Pacquiao, as someone convinced him to terminate their services before they had an opportunity to present their evidence.



Considering that this information was just discovered less than 6 months ago, it's understandable why the BIR is now conducting their own investigation into his contracts.

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