Irish horse racing magnate and billionaire JP McManus is fighting US tax authorities over how his winnings from an epic 2012 backgammon run should, or should not, be taxed.

At issue is approximately $5.2 million of $17.2 million McManus won during a three-day long match with American billionaire Alec Gores. When the backgammon binge was over, the two titans settled up and Gores kept $5.2 million to pay off the IRS.

That sat well with the IRS, but McManus was having none of it. He, and his lawyers, maintain that the US and Ireland operate a 1997 treaty that keeps citizens of both countries from being double-taxed on money made in either country.

McManus’ interpretation of tax law isn’t one that’s shared by the IRS. They maintain that McManus wasn’t even an official resident of Ireland in 2012 because he didn’t file taxes there that year. The IRS went on to accuse McManus of maintaining multiple international residents in order to avoid paying taxes.

IRS officials went on to say that McManus’ legal reasoning, “bends the law beyond the breaking point.”

Adding further intrigue to the story are reports that McManus’ sketchy status as an Irish taxpayer was reported to the IRS by their Irish counterparts. Though McManus wants desperately to learn the name of the tax official responsible for the report, the Irish government has yet to turn that information over to him.

One of the biggest questions surrounding this story is why a billionaire would fight so hard over an amount that, by his standards, is relatively small?


Tags: ,

Related posts: