Pacquiao set to make $20 million with some going to IRS

USA Today is reporting that some of Manny Pacquiao’s guaranteed purse from Saturday’s fight against Timothy Bradley may be taken by the IRS to pay for old tax debts.  The fighter is scheduled to make no less than $20 million for his rematch with Bradley.

Bad Left Hook reports that both Pacquiao and Bradley will make $6 million according to the Nevada State Athletic Commission.  But, Bob Arum stated that Pacquiao would be guaranteed $20 million. Pacquiao made a guaranteed $18 million in his last fight against Brandon Rios although that fight was held in Macau. The purses for both fighters do not include PPV upside which could do anywhere from 700,000 to over 1 million PPV buys.  The last fight between the two drew 890,000 PPV buys.

As for the tax question, Pacquiao’s earnings in the U.S. are being scrutinized and it’s likely that he will owe money from this fight according to Pacquiao’s people.  However, they downplayed the seriousness of the audit by the IRS.  Not only does Pacquiao have tax issues here, but there are claims that the Bureau of Internal Revenue in the Philippines is investigating the fighter for unpaid back taxes which could be as much as $50 million.

Payout Perspective:

The alleged tax debt is a concern for Manny in light of cases such as Felix Trinidad who is reported out of money after an aide squandered over $63 million from Trinidad’s fight earnings. As much as Pacquiao makes, it would be unfortunate if his earnings are squandered away due to lack of paying taxes or people mismanaging his wealth.