IRS Wants $702 Million From Michael Jackson's Estate
The estate said the taxable value of the singer's image and likeness was $2,105, while the IRS says it's more like $434 million.
The estate's stake in Jackson's recording assets was valued at $469 million by the IRS, but was not even included in the 2009 estate filing.
The Internal Revenue Service says that the Michael Jackson estate owes $702 million in federal taxes, plus penalties, according to charges the agency brought in U.S. Tax Court.
IRS representatives say the estate has undervalued the late "King of Pop's" assets by hundreds of millions of dollars, amounts they say were not disclosed in a court challenge the estate filed in July, as a response to a bill from the IRS.
Essentially, the estate is saying Jackson's legacy is worth considerably less than the tax agency believes it is.
Jackson died on June 25, 2009, which is the date of the estate's tax return, and left his estate to his mother Katherine, his three children and various charities. The filing the estate submitted indicated that his estate was valued at $7 million, for tax purposes. But in May the IRS said that was deficient by $505.1 million, plus penalties of $196.9 million. Tax Court documents indicating the amounts were released Tuesday, said Reuters.
A spokesperson for the Jackson estate disputed the IRS's appraisals, telling Reuters that they were "based on speculative and erroneous assumptions unsupported by the facts or law."
So far, the Jackson estate has paid $100 million in taxes, said the spokesperson.
But as per Tax Court rules, the estate will not have to pay any taxes or penalties unless the court rules in favor of the IRS.