Given the recent reports regarding Manny Pacquiao's tax issues in both the Philippines and the United States, FightHype.com reached out to VisionQwest Accountancy Group, the full service accounting firm that was originally hired by the 8-division world champion back in 2010 to review his financial records in hopes of resolving an ongoing IRS audit of his taxes for the years 2006 and 2007. As the company began to dig deeper, they quickly discovered that his accounting was in a complete state of disarray, with records made up of hand-written notes, a series of unorganized emails, and six boxes of receipts.
When VisionQwest began the process of researching and organizing his records, they discovered "various accounting issues" and became concerned with a number of questions that remained unanswered. Unfortunately, they never had an opportunity to relay their concerns to Pacquiao, who unexpectedly terminated his contract with them shortly before a meeting the company scheduled with him in order to reveal some "open issues" they found from the research they conducted.
That was in August of 2011. Fast forward 2 years and we find Pacquiao still dealing with the tax issues that he originally hired VisionQwest to look into. According to a press release that was sent out at the time of their termination, VisionQwest became even more concerned about Pacquiao's finances when they discovered "ridiculous amounts of money" being paid to Michael Koncz. In fact, the press release went so far as to say that Michael Koncz not only worked for Manny Pacquiao, but Top Rank, Inc. as well. It should be noted that according to VisionQwest, during the tax years in question, from 2006 to 2010, Michael Koncz acted as Pacquiao's business advisor, despite the fact that he has no accounting degree, and as such, he was responsible for his finances and ensuring his taxes were filed. When contacted for more clarification on the matter, a representative from VisionQwest had the following to say:
VisionQwest Accountancy Group has been on record in past interviews and statements that we had a big concern over Manny's tax situation in the United States and in the Philippine BIR. As stated before, Manny had no accounting organization behind him to generate true income and expense numbers to file a tax return. What was given to the tax accountants, and even to our firm, were hand written notes from Michael Koncz that showed income and expense numbers to be used in preparing the tax return(s). However, Michael Koncz was not able to provide documentation to backup the numbers. In order for an expense item to be allowed for deduction on the tax return, it has to have a receipt or canceled check, bank record to back up the expensed item. We expressed to Manny and Franklin Gacal through a letter that we had no confidence in the numbers that had been prepared because there was no backup. When an audit is being performed by the IRS, they are looking at income, expenses, taxes paid, and the net result that the IRS will make a determination on. If income has not been reported correctly and there is no documentation from the taxpayer, the deduction will be disallowed by the IRS and there will be a tax due. We have expressed our concerns very clearly to Manny and his Philippine legal counsel.
We asked Manny to provide us with receipts on everything that they had spent that related to their boxing. We then received over four large boxes filled with thousands of receipts covering many years. So we started the documentation process and then Manny terminated our contract. We wished that we could have continued because we have the complete story of the financial documentation, contracts, etc. As well as the review of Top Rank we were contracted to do by Manny. The tax story will always continue until a decision is made to organize the financial affairs and records and know what the IRS and the BIR will allow and disallow. We wish Manny the best of luck and hope that he is able to resolve the tax issues and create a strong financial management team around him.
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