The American tax authorities have rejected demands from former Manchester United owner, JP McManus, that they hand back their share of his $17.4m (£12m) winnings from a 72-hour backgammon game in California.
Washington court papers show the Internal Revenue Service (IRS) disputes a McManus claim that paying a relatively small “domicile levy” in Ireland should leave him exempt from $5.2m of tax taken by US authorities, according to the Irish Times.
The IRS argues that the Irish businessman is primarily resident in Switzerland “and thus he was not deemed a resident of Ireland for tax purposes” and therefore open to paying fiscal duties in America.
The US authorities go on to argue that the court claim by the Limerick gambler and racehorse owner to recover the tax paid should be dismissed because it “bends the law beyond breaking point”.
McManus started legal action in Washington last August after the $5.2m was subtracted from his winnings following a three-day backgammon game against Alec Gores, a US private equity billionaire.
Gores, who is said to count actor Ben Affleck among his celebrity acquaintances, withheld the cash and handed it over to the federal tax collectors. As part of the legal stand-off, McManus has been asked to provide details about the astonishing three-day gambling stint.
“[McManus] does not remember the number of games or the amounts wagered per game,” said the Irishman’s lawyers in formal responses. “The wager was on the basis of points, and the amounts to be wagered were altered during the competition at the request of the losing party. Several people came and went during the game serving food and beverages.”
The Limerick-born horse-racing tycoon began his working life in the family construction plant hire firm before becoming an on-course bookmaker at the local greyhound track.
The 65-year-old, nicknamed early on in his career the Sundance Kid for his good luck, went on to make a fortune that has been estimated at over £600m.
That money – and more gained from currency trading – has been used to fund racehorses, houses and investment in a string of businesses including a stake in Manchester United.
He later sold this on to the current US owner, Malcolm Glazer, after famously falling out with the club’s manager, Alex Ferguson, over a business deal involving the horse, Rock of Gibraltar.
McManus is said to travel everywhere with a portable backgammon set which he will produce at a moment’s notice should he find a willing competitor. A New York-based news service founded by Tina Brown, the Daily Beast, said friends of McManus were convinced the Irishman would not be giving up on his claim to recover the tax money.
“JP is not the kind of guy to roll over and say, ‘Oh, forget about it. Don’t forget JP started with virtually nothing. His fortune stems from a £4 bet made when he was 20 in 1970.”
McManus does his best to stay out of the limelight but he was briefly caught by the Limerick Leader at a horse race where he admitted: “I’d bet on anything if I could find someone to bet with me. But looking back, and as a friend pointed out to me, you change the addiction to gambling to one for winning. It’s not the gambling that’s important, it’s the winning.”
