US insists JP McManus not Irish resident when over $17m won

The United States government has repeated its argument that businessman JP McManus was not a resident of the Republic in 2012 when he won $17.4 million from gambling in the US.

The argument is repeated in the latest filing in a case where the businessman is seeking a $5.2 million income tax refund arising from his 2012 gambling winnings.

In an amended complaint filed late last year the investor, gambler and racehorse owner said that he was a “citizen, domiciled and resident of Ireland” as defined in the double tax treaty between Ireland and the US. He also said that in 2012 he earned income outside of Ireland “which was generally not subject to Ireland’s provincial geographic income tax structure”.

Mr McManus is seeking the refund of $5.2 million withheld by Alec E Gores, a US technology investor described in the court filings in the US as the "payor" [withholding agent]" who withheld the money from the $17.4 million total to "cover any potential United States federal income tax liability".

Court papers

How the gambling winnings arose is not disclosed in the court papers.

In its response to the amended complaint, the US authorities have said they accept Mr McManus had an Irish passport in 2012 but do not know if he was a citizen of Ireland or was domiciled there. The filing denies he was a resident there in 2012, as defined in the tax treaty. It also said it did not have information as to any other earnings Mr McManus may have had outside Ireland in 2012.

It also denied the US Internal Revenue Service approved Mr McManus’s tax refund claim in August 2014 before remanding the issue to another IRS department for review. Mr McManus, it said, did not file an income tax return in Ireland in 2012 and benefited materially from this. He is taking a contrary position in the US dispute, so he is stopped from making the argument in the US courts, it said.