Manny Pacquiao stands to pay millions in taxes to the Internal Revenue Service of the US if he insists in holding his entire training camp for the November 14 fight with Miguel Cotto on American soil.
Owing to an IRS regulation called the Substantial Presence Test, Pacquiao has been told by Hall of Fame promoter Bob Arum to spend the first half of his eight-week training camp outside the US to avoid shelling out “millions of dollars.”
Arum’s promotional outfit Top Rank is staging the Pacquiao-Cotto bout at the MGM Grand in Las Vegas and the Harvard-educated lawyer has informed the Filipino that he ought to set up camp in the Bahamas, Mexico or Canada.
Arum said if Pacquiao insists on training exclusively on US territory just like in the past, his earnings will be subjected to taxes.
“All of his income from around the world will be subject to tax,” said Arum.
But if Pacquiao follows Arum’s advise, “just his purse for the fight (with Cotto) will be subject to tax.”
Pacquiao lawyer Franklin Gacal said they knew all along that the IRS would one day knock on their door.
“We’ve been told about this even before so we’re not surprised,” said Gacal, who is likewise setting his sights on Vancouver as an option to host Pacquiao’s training camp.
Meanwhile, Team Pacquiao will come out with an announcement regarding the on-going negotiations the moment Gacal confers with Arum.
“I have been given instructions by Manny on the matter,” said Gacal yesterday afternoon after efforts to contact Arum proved futile.
Meantime, Cotto told the Puerto Rican press that for him to defend the World Boxing Organization (WBO) welterweight crown, the fight with Pacquiao should be at 147 lbs, and not at a catch weight of 145 lbs.
Source: http://www.mb.com.ph/articles/213893/why-pacquiao-can-t-train-long-us-soil
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