Undefeated boxer Floyd “Money” Mayweather owes the IRS over $22.2 million in taxes from 2015. Mayweather earned $200 million from a fight against Manny Pacquiao and has yet to give the IRS their cut of the winnings. A federal tax lien was filed with county officials in Las Vegas in April for the unpaid taxes. Mayweather petitioned the D.C.-based U.S. Tax Court on July 5 to hear his case in Las Vegas.
The boxer asked for an interesting concession from the IRS, considering he has earned over $700 million in his career. He requested a three-month installment agreement to pay back the debt, contending that his assets are “restricted and primarily liquid.” Unfortunately for “Money,” the IRS denied the installment request. The IRS reasoned that with an estimated 2015 income in excess of $200 million, Mayweather had enough assets to cover the tax bill.
Generally, the IRS freezes collection activity as soon as taxpayer contests a lien, so Mayweather may be attempting to use the appeals process to buy himself some time. His upcoming match against UFC mixed martial arts fighter Conor McGregor is estimated to bring in at least $100 million for Mayweather. His attorney Jeffrey Morse commented, “the taxpayer has a significant liquidity event scheduled in about 60 days from which he intends to pay the balance of the 2015 tax liability due and outstanding.”
Mayweather is no stranger to tax trouble. The lien for 2015 is just the most recent in a sequence of tax liens filed by the IRS against Mayweather over the past ten years. Up until this point, the boxer’s comments about his tax situation have been lighthearted and dismissive. No criminal charges have been filed against the boxer to date, but if he continues to evade his tax liabilities, he may be facing serious penalties in the future.
Though someone with Mayweather’s income would likely not be eligible for an installment plan, there are many tax relief strategies available to taxpayers who actually need them. If your tax obligations are causing you undue hardship, you may want to consider filing for tax relief. If you have received any of the following notices from the IRS, you might be entitled to request a hearing to have a tax attorney present your case for relief:
Taxpayers have a wide range of options to consider when they find themselves unable to pay their tax liabilities. The following are just a few of the methods an experienced tax relief attorney might suggest:
An offer in compromise is an agreement between a taxpayer and the IRS that settles a taxpayer’s tax liabilities for less than the full amount owed. Many Americans have settled a credit card debt in the same way. However, if a taxpayer has the ability to fully pay their liabilities through an installment agreement or another method, they likely will not qualify for an OIC. The IRS will accept an OIC based on three grounds:
If your tax debt is more than you could ever afford to pay, an offer in compromise is a good option to consider.
The Collections Due Process is a hearing procedure created to give taxpayers the right to appeal lien and levy actions before a neutral, impartial officer. At the hearing, the taxpayer may raise challenges to the collection actions, seek innocent spouse relief, and present alternative collection actions. In certain limited circumstances, the debtor may discharge the underlying tax liability. Those considering this option should keep in mind that entering into this appeals program is binding and requires taxpayers to waive their right to further appeal or relief proceedings in federal court. While this process is often used to appeal the cancellation or denial of an installment agreement, it can be used to provide a pathway to relief for other concerns.
These are just some of the available tax relief options in California. Installment plans, short-term extensions, tax-motivated bankruptcy, lien subordination, innocent spouse relief, and voluntary disclosures can also be utilized to help taxpayers in trouble. An experienced tax attorney can thoroughly explain each process and help decide which will yield you the best results.
If you are facing an undue hardship due to the imposition of significant tax obligations, penalties, and interest, you may want to contact a tax relief attorney. By taking the proper steps to request tax relief, your burden can be greatly reduced. The tax professionals at The Tax Law Offices of David W. Klasing are dedicated to mitigating the consequences faced by taxpayers who have accidentally (or intentionally) strayed from tax compliance. Whether you are seeking tax relief, facing an audit or criminal investigation, our team of attorneys, CPAs and EAs can provide guidance and aggressive advocacy. To schedule a tax relief consultation with an experienced tax professional from the Tax Law Offices of David W. Klasing call (800)-681-1295 today or contact us online.
Watch our Tax Relief Video, here.