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Originally posted by nathan_nall
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While there are tales of his ******** and needing of cash advances, these tales come from Bob Arum. If Arum is an honest guy, which I think he is, then it must be true. But trouble with the IRS doesn't necessarily mean you're a poor steward of your finances. Even more so, owing a substantial amount to the IRS (when you're extremely wealthy), by no means, indicates you're destitute.
If you remember, Floyd Jr. was also in deep with the IRS and owed them a substantial amount of backed taxes (far more than Manny owed). To understand how someone can owe the IRS a ****-ton of money AND still be ****** rich, you must understand what form their wealth is currently taking, the vigilance of the IRS in auditing the wealthy, the extremely complex and every changing U.S. tax code, and the repayment deals negotiated with the IRS.
First, being worth $200 million is not the same as having $200 million in a bank account. Most of the extremely wealthy have independent firms handling their vast wealth and thus invest the largest percentages of their wealth into various profiting endeavors. It wouldn't surprise me if most of our sports stars didn't also own real estate, loads of stock shares, bonds, and even investments in foreign currencies. The point being, if someone says "you owe me $15 million! Pay now!" like the IRS (or ISIS) might say, the super wealthy just don't have that kind of money as a liquid asset sitting in a bank account somewhere. You'd be an idiot too, knowing that banks can and do fail and you're amount is only federally secured up to $100,000. Even the super wealthy have to say "Of course I don't have that kind of money on hand. I need at least a few days to come up with it". That usually involves the dumping of stock for a quick gain in liquid assets.
I'll sum up the next two points together. Most of us on here have one or two jobs, a steady paycheck, and a bank account where we deposit that paycheck. We are told how much we've made in a convenient W2 by our employers and how much tax THEY have conveniently withheld from our pay and given over to the IRS on our behalf. They know, based on our salary/hourly rate, precisely what bracket we fit into and how much we should have payed. And even if we've made a mistake along the way, no one will ever know because the IRS just simply doesn't care about us. We're small fish. Most of us on here could go decades without paying taxes and would never be found out. Actually, quite a few of us on here probably aren't required to pay any taxes (which is horse **** to me, but another discussion entirely). If you own your own business and are your own boss, things get MUCH more complicated. There are hidden taxes upon your taxes that you'd never know about. If you are a multimillionaire with investments and 30 to 40 different income sources, YOU WILL NOT GET IT RIGHT come tax season. You have to hire an independent firm to file your taxes on your behalf and you plan on asking for extension after extension because the process will take 2 years. You'll be paying 2013's taxes in 2015. And because you are a BIG FISH, the IRS audits you yearly and will hold you accountable for every red cent you NEVER knew you owed them. And when you need time to generate that kind of cash-on-hand, you ask for yet another couple of extensions.
Now, if you're Manny. You're paying taxes in three countries (U.S., Philippines, and China because of your earnings in Macao). So, take that whole headache and triple it.
Mike Tyson was really dumb with his money, and sunk himself into a hole. Then, he got people who were smart with his money to help dig him out. Even with smart people in his financial corner... he's supposedly still paying back the IRS backed taxes from the early 90s.
Moral of the story, Pacquiao isn't broke. He never was and he probably never will be. He, like every uber-wealthy person who has ever earned a dollar in the U.S., is at times required to pay enormous sums of money in one big balloon payment. That could be to the IRS... it could be to a shylock. Either way, if it's between asking your promoter for an advance and going to jail/getting your legs broken... you ask for the damn advance and then pay it back when you've earned or freed up some cash.
What Pacquiao did with Arum is what each of us does every time we charge a steak dinner to our credit card. Was ask someone else to "cover us" until we can pay them back.
If you remember, Floyd Jr. was also in deep with the IRS and owed them a substantial amount of backed taxes (far more than Manny owed). To understand how someone can owe the IRS a ****-ton of money AND still be ****** rich, you must understand what form their wealth is currently taking, the vigilance of the IRS in auditing the wealthy, the extremely complex and every changing U.S. tax code, and the repayment deals negotiated with the IRS.
First, being worth $200 million is not the same as having $200 million in a bank account. Most of the extremely wealthy have independent firms handling their vast wealth and thus invest the largest percentages of their wealth into various profiting endeavors. It wouldn't surprise me if most of our sports stars didn't also own real estate, loads of stock shares, bonds, and even investments in foreign currencies. The point being, if someone says "you owe me $15 million! Pay now!" like the IRS (or ISIS) might say, the super wealthy just don't have that kind of money as a liquid asset sitting in a bank account somewhere. You'd be an idiot too, knowing that banks can and do fail and you're amount is only federally secured up to $100,000. Even the super wealthy have to say "Of course I don't have that kind of money on hand. I need at least a few days to come up with it". That usually involves the dumping of stock for a quick gain in liquid assets.
I'll sum up the next two points together. Most of us on here have one or two jobs, a steady paycheck, and a bank account where we deposit that paycheck. We are told how much we've made in a convenient W2 by our employers and how much tax THEY have conveniently withheld from our pay and given over to the IRS on our behalf. They know, based on our salary/hourly rate, precisely what bracket we fit into and how much we should have payed. And even if we've made a mistake along the way, no one will ever know because the IRS just simply doesn't care about us. We're small fish. Most of us on here could go decades without paying taxes and would never be found out. Actually, quite a few of us on here probably aren't required to pay any taxes (which is horse **** to me, but another discussion entirely). If you own your own business and are your own boss, things get MUCH more complicated. There are hidden taxes upon your taxes that you'd never know about. If you are a multimillionaire with investments and 30 to 40 different income sources, YOU WILL NOT GET IT RIGHT come tax season. You have to hire an independent firm to file your taxes on your behalf and you plan on asking for extension after extension because the process will take 2 years. You'll be paying 2013's taxes in 2015. And because you are a BIG FISH, the IRS audits you yearly and will hold you accountable for every red cent you NEVER knew you owed them. And when you need time to generate that kind of cash-on-hand, you ask for yet another couple of extensions.
Now, if you're Manny. You're paying taxes in three countries (U.S., Philippines, and China because of your earnings in Macao). So, take that whole headache and triple it.
Mike Tyson was really dumb with his money, and sunk himself into a hole. Then, he got people who were smart with his money to help dig him out. Even with smart people in his financial corner... he's supposedly still paying back the IRS backed taxes from the early 90s.
Moral of the story, Pacquiao isn't broke. He never was and he probably never will be. He, like every uber-wealthy person who has ever earned a dollar in the U.S., is at times required to pay enormous sums of money in one big balloon payment. That could be to the IRS... it could be to a shylock. Either way, if it's between asking your promoter for an advance and going to jail/getting your legs broken... you ask for the damn advance and then pay it back when you've earned or freed up some cash.
What Pacquiao did with Arum is what each of us does every time we charge a steak dinner to our credit card. Was ask someone else to "cover us" until we can pay them back.
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