10 Jul 17 Boxelder Consulting
Image: Chris Carlson/Associated Press
Boxer Floyd Mayweather Petitions IRS: Claims He Can’t Pay 2015 Tax Liability
Floyd Mayweather is set to fight the UFC Irish bad-boy, Conor McGregor, on August 26th. The fight will no-doubt be one for the books. However, for Mayweather, this fight is about much more than just getting another win in the ring.
The widely considered G.O.A.T boxer claims that he cannot pay off his 2015 tax liability until after he gets money from the fight. On July 5th, Mayweather filed a tax court petition asking the IRS to allow him a reprieve until after the fight.
To most people, it probably doesn’t make sense how one of the wealthiest athletes in the world can’t pay his taxes on time. According to the petition, much of his assets are “restricted and primarily illiquid”.
The amount of money that Mayweather owes to the IRS is unknown, but it’s quite hard to believe that anyone with a $6 Million exotic car collection or a $34 Million private jet could be having tax issues.
Mayweather is expected to make a similar amount of money off of the McGregor fight as he did from his fight with Pacquiao in May of 2015; that number was about $220 Million.
The petition not only requests a reprieve until the McGregor fight but also to reduce the penalty Mr. Mayweather received from not paying all of his taxes for the year.
The penalty is called a “Failure to pay”, which in most cases is .5% of what you owe in taxes for each month the balance isn’t paid. So if his 2015 taxes are 15 months past due, that would mean he’s going to owe about 7.5% in addition to his current balance.
But that’s not all.
He will not only get a “Failure-to-Pay” penalty, but almost certainly a “Failure to Make Proper Estimated Tax Payments” for 2015. If you receive untaxed income, you are supposed to make quarterly estimates.
From the IRS –
“If you didn’t pay enough tax throughout the year, either through withholding or by making estimated tax payments, you may have to pay a penalty for underpayment of estimated tax. Generally, most taxpayers will avoid this penalty if they owe less than $1,000 in tax after subtracting their withholdings and credits, or if they paid at least 90% of the tax for the current year, or 100% of the tax shown on the return for the prior year, whichever is smaller.”
Unfortunately, none of these exceptions apply to Mayweather’s situation. It will be interesting to see how this situation plays out for the Boxer, but the ordeal will likely cost him some pretty serious cash.