Monday 24 October 2016

McManus to fight US government over €4.8m tax bill

Published 05/01/2016 | 02:30

Limerick-born tycoon and racehorse owner JP McManus. Photo: Alan Crowhurst/Getty Images
Limerick-born tycoon and racehorse owner JP McManus. Photo: Alan Crowhurst/Getty Images

Billionaire JP McManus is refusing to back down in a row with the US government over a tax bill of $5.2m (€4.8m).

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The racehorse owner has renewed efforts to secure a tax refund for the sum, court papers seen by the Irish Independent reveal.

The disputed cash was part of a $17.4m (€15.9m) pot he won in 2012 while gambling against US technology investor Alec Gores.

Lawyers for the US Department of Justice last year rejected arguments made by Mr McManus that he did not have a tax liability on the winnings.

However, the Limerick-born tycoon has renewed efforts to lay claim to the cash in recent days, filing an amended complaint with the US Court of Federal Claims in Washington.

Precisely how the money was won from Mr Gores was not revealed in the legal papers. However, the US businessman has previously been identified in another lawsuit as being involved in high-stakes underground poker games in Beverly Hills, along with Hollywood actor Tobey Maguire.

In the new claim, submitted on Mr McManus's behalf by a Texas law firm, it is argued Mr Gores "erroneously withheld" $5.2m "to cover any potential United States federal income tax liability".


The lawyers argued that Mr McManus had already paid a €200,000 domicile levy in Ireland, a flat tax on Irish-domiciled individuals whose world-wide income exceeds €1m and who own Irish property with a value greater than €5m.

The lawyers claim that because he paid this levy, Mr McManus's gambling winnings were exempt from tax in the US under a treaty for the avoidance of double taxation.

Mr McManus originally sought to have the money returned to him by the US Internal Revenue Service (IRS) in 2012 and his lawyers claim the refund was approved in August 2014. However, the following month, the request was remitted to another IRS department for an additional review.

The US Department of Justice has previously said it is opposed to the tax refund request as it did not believe Mr McManus was resident in Ireland for tax purposes in 2012.

It also said Mr McManus had not filed an income tax return in Ireland for the 2012 tax year.

According to the legal papers, the matter is unlikely to go to a full hearing. Both sides are in agreement that the issues in dispute are primarily legal interpretations of tax laws and that the court can issue a summary judgment based on submissions made to it.

Irish Independent

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