On June 25, 2009, the world reacted to news of Michael Jackson’s untimely death. The 50-year-old King of Pop died that day—and that day was also the date on his estate’s tax return.
Recently, the IRS informed Michael Jackson’s estate that it owed about $702 million in federal taxes and penalties. Specifically, the IRS filed a claim in US Tax Court, alleging that the estate undervalued some of Jackson’s property by millions of dollars and that it owes the federal government $505.1 million in taxes and $196.9 million in penalties.
The 2009 Michael Jackson estate tax return allegedly reported a $7 million taxable value. In that valuation, the estate claimed that the value of Michael Jackson’s image and likeness was $2,105. The IRS believes that the value of Michael Jackson’s image and likeness is $434 million. Additionally, the estate and the IRS reportedly differ in their valuations of the estate’s portion of some of Michael Jackson’s recording assets. Specifically, the estate did not include the value of the MJ/ATV Publishing Trust interest in New Horizon Trust II, and the IRS valued the estate’s interest in the Trust at $469 million. Other discrepancies between the trust and IRS valuation were also reported.
The Jackson estate reportedly contests the IRS valuation but has indicated a willingness to pay $100 million to settle the dispute.
If you are having a dispute with the IRS, then it is important to get advice from an experienced Oklahoma tax lawyer and to read our FREE library article, “I Am in Trouble With the IRS - Do I Need a Lawyer?” for more information about protecting your rights.