One of the great unknowns when you enter the boxing ring is how hard your opponent will be able to hit you. In recent times, the Inland Revenue has just delivered a couple of powerful punches to the face of David Tua, claiming he owes a whopping $2.2 million in unpaid taxes.
Inland Revenue has frozen David Tua’s funds from his past three fights. One can only feel sympathy for the heavyweight boxing champion. His drawn out court battle between his “trusted” managers has been settled but now he has been left with a huge tax bill from previous fights as a result of their careless actions.
His managers didn’t look after his tax affairs and this is why IRD have frozen David’s funds from the last couple of fights. David claims he is “just a fighter” and that his manager attended to every other detail of his professional boxing life. David claimed that he just relied on his manager so he could just fight. He signed things exactly as they were put in front of him. Tua’s newly appointed chartered accountant has described the accounts as a shambles.
As a result of the latest tax bills, David doesn’t have enough money to get proper training, food and supplements and doctors and therapy.
As Benjamin Franklin once said, nothing is certain except death and taxes. One must remember that we operate a self assessment regime here in New Zealand. That is, the administration of the New Zealand tax system is based on taxpayers assessing their own tax liabilities by lodging returns with the Inland Revenue.
Taxpayers must assess their own tax liabilities and are responsible for:
• Considering the facts relating to their own financial affairs
• Interpreting and applying the law to those facts
• Determining the amount of tax owing, and
• Making that determination with an appropriate degree of finality.
At the end of the day, the onus of proof falls on taxpayers themselves, they cannot discharge this responsibility. It is, after all the taxpayer’s signature on the dotted line.
With the guidance of a respected tax advisor, taxpayers must ensure they have a reasonable understanding of their tax and financial affairs. David will now be going into fights knowing he will not get any financial reward at all because it is all going to the Inland Revenue.
I have to pose the question – can a man who earns millions of dollars by knocking people out really be that naïve when it comes to his taxes and financial affairs, or is this beguiling innocence a great act?
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Aside from boxing he is famous for saying “O” for “Awesome” on Celebrity Wheel of Fortune. That was a decade or 2 ago but unfortunately that show of ignorance (no offence intended) will attract an unsavory type. His manager was in a position of trust & received compensation to manage the business while David concentrated body & mind on the next professional bout. Yes, I agree he is responsible for his own taxes but many of our clients are in a similar position where they rely heavily on their financial advisor. It just takes one bad egg it seems. Interesting enough David’s situation is similar in nature to Sylvester Stallone’s Rocky V, where he finds himself bankrupt through the fraudulent nature of his accountant and returns to his hometown to run a gym. I do hope David finds some kind of resolution with IRD because boxing is a brutal sport and I would hate for him to be still fighting in his senior years.