Last week it was revealed that Michael Jackson's estate is suing the IRS over the agency's valuation of the King of Pop's assets for federal estate tax purposes which has resulted in the estate being slapped with a $505.1 million estate tax bill and $196.9 million in underpayment and late penalties. According to Reuters, while the executors of the estate valued MJ's taxable assets at only $7 million as of his date of death in June 2009, the IRS valued them at $1.5 billion. Not a lot of the meeting of the minds in this case, for example:
- The estate valued Jackson's "image and likeness" at a mere $2,105; the IRS's value - a whopping $434 million.
- For reasons that are not clear at this time, the estate did not include the value of MJ's 50% interest in the Sony/ATV music catalogue on the estate tax return; the IRS valued the interest at $469 million.
Other assets that appear to be in contention are the estate's interest in Neverland Ranch and MJ's vast art collection. While the IRS will not comment on the lawsuit -- federal law actually prohibits the IRS from doing so -- a spokesperson for MJ's estate said on Friday that the IRS's appraisal values "were based on speculative and erroneous assumptions unsupported by the facts or law."
So will MJ's estate have to fork over $702 million to the IRS? This seems highly unlikely given the fact that it is common knowledge that Michael Jackson was severely in debt at the time of his death, with estimates in the $500 million range. However, it is likely that the estate will have to pay something else given the billions of dollars separating the estate's values and the IRS's values.
- Michael Jackson's Estate To IRS: Beat It
- Michael Jackson estate fights U.S. IRS in Tax Court
- U.S. agency says Michael Jackson estate owes $702 million in taxes
- Why The $702 Million IRS Tax Claim On Michael Jackson's Estate Won't Stand Up
- Overview of 2009 Estate Tax Filing Requirements
- What Does Michael Jackson's Will Say?
- What Does Michael Jackson's Family Trust Say?
- A Collection of Blogs About Michael Jackson's Estate and Trust