Inland Revenue has filed court papers seeking $3.58 million in unpaid taxes from Wellington Phoenix owner Terry Serepisos.
It has applied to liquidate five companies, including Century City Football, which owns the A League soccer club, which is said to owe $1.5m in PAYE tax deductions, GST, and KiwiSaver contributions, the Dominion Post reported today.
Formal proceedings to apply for liquidation were filed with the High Court last month and the application will be heard on December 13.
Mr Serepisos acknowledged he had a tax liability but expected it to be resolved in the next few weeks.
In a statement he said Century City had been in discussions with IRD "for some time" about a tax liability and an arrangement was in place to address the matter before the end of the year.
Inland Revenue was following normal legal procedure over liability and the company was confident the matter will be resolved, he said.
A spokesman for Inland Revenue said it did not comment on individual taxpayer affairs.
Mr Serepisos has extensive property holdings in Wellington and has been dogged by financial troubles this year.
In September, ACC moved to liquidate the football team for $261,000 in outstanding payments. Wellington and Hutt city councils have substantial outstanding rates claims against properties owned by Mr Serepisos.
Last month he reached an out-of-court deal to settle $8.95 million owed to Canterbury Mortgage Trust.
NZ Football chairman Frank van Hattum said he knew nothing of the IRD claims but "anything that affected the Phoenix as an organisation going forward is a worry".
Wellington City Council sports portfolio leader, councillor John Morrison, said the loss of the Phoenix would have a massive impact on the city.
A study showed the Phoenix's 11 home games last season contributed $7.9m to the local economy and generated 68 fulltime jobs in the region.
That economic boost to the city was obviously in jeopardy, Mr Morrison said.
"That is of huge concern. Exactly what we do about it, I'm not sure. We [the council] can't be seen to be taking over or propping up football teams.
"But it would also be wrong to say that we should turn a blind eye to this."
Professional Footballers Association of Australia chief executive Brendan Schwab said it would look to ensure all player entitlements were being met.
However, using court action to try to recover debts did not necessarily mean Century City Football was collapsing, he said.
Phoenix and All Whites player Leo Bertos said he was a KiwiSaver member and believed the company was matching his contributions dollar for dollar.
"I'll have to get that checked out now but as far as I know everything's all right," he said.