21st July 2017
The 26th August fight between boxer, Floyd Mayweather and UFC star Conor McGregor is likely to be the biggest sporting event in history. It costs a staggering $100 to buy the event on pay-per-view in the US and both competitors are set to land well in excess of $100m each for a matchup that many don’t think should even take place. Regardless of your feelings towards the event – and to both fighters – it’s likely to be a spectacle like no other. However, one competitor has a bigger fight on the cards, namely with the IRS.
Floyd Mayweather tax problems
Floyd Mayweather has never been one to shirk the limelight and any followers of his social media accounts will be all too familiar with his money-flashing ways. However, it seems as if this behaviour has landed the much-lauded boxer in hot water and, not for the first time, he’s being chased down by the US tax authority.
But why is he in trouble? Mayweather still owes the IRS for federal income taxes in 2015. He says he has already made the payment and has posted cheque stamps online that suggest he paid back £28m that year. However, the tax authority refused to budge and in the past few weeks the boxer has taken it to court. While there’s no doubt that Mayweather is exceptionally wealthy, some have suggested he may be cash short and struggling to pay the amount he owns. That means he has launched the court battle to essentially stall until his mega payday with McGregor next month.
Battling the taxman
Floyd Mayweather’s tax issues roll on and although the IRS has been lenient about granting payment delays and instalment agreements – particularly when the period of time is relatively short – the scale of Mayweather’s assets and the amount of tax he owes may force the IRS into refusing his request and demanding full payment almost immediately. Mayweather will also have to pay tax on this fight, which could make him as much as $400m if estimates are to be believed.
This case highlights the growing fight against tax evasion taking place all around the world. Floyd Mayweather will have to pay his taxes back at some point – and the IRS knows it will be in for a massive windfall once he does – however the pressure they’re putting on his is indicative of the growing severity of tax authorities. While the boxer will almost certainly have the resources and liquid assets to foot his bill, the vast majority of agencies wouldn’t be able to deal with an unexpected and sizeable penalty. And with the introduction of the Criminal Finances Act in September, any hiring firm found to be facilitating evasion or avoidance, in the UK at least, could be on the end of an unlimited fine and its directors could receive a significant prison sentence. Ultimately, it’s not worth taking the risk. If your firm wants to avoid being on the end of serious penalties, then partner with a specialist to ensure your tax status is fully compliant wherever you’re operating in the world.