*Will Michael Jackson ever really rest in peace?
Just when you think things have gone quiet with all the drama, a new legal situation surfaces. The L.A. times reports that the IRS is asking for their piece of the King of Pop’s estate. More specifically, they’ve informed the executors of the estate that they owe $505 million in taxes and $197 million in penalties. The total amount owed comes up to more than $702 million.
Documents filed with the U.S. Tax Court in Washington state that Jackson’s executors placed the entertainer’s net worth at the time of his death in June 2009 at slightly more than $7 million. This counters the IRS’s value, which it calculated it to be $1.125 billion.
The noticeable inaccurate difference resulted in Jackson’s return qualifying for a gross valuation misstatement penalty, the IRS stated, while adding that the misstatement penalty would allow the government to double the usual 20% penalty for underpayment.
A lot of the debate between the estate and the IRS revolves around the value of Jackson’s image, along with his interest in a trust that includes the rights to some of his songs and most of the Beatles catalog. The value of Jackson’s likeness, according to his estate, is $2,105. The IRS’s value of the singer’s image: $434.264 million.
As for the trust with the Beatles’ and Jackson’s, the estate puts it at zero, while the IRS has it at $469 million.
Jackson’s music has generated a surge in popularity since his death. According to a July 2012 court filing, the estate had earned $475 million. In October 2013, Forbes magazine reported that Jackson was the highest-paid celebrity that year — dead or alive — earning $160 million. The magazine also noted that much of the money came from two Cirque du Soleil shows based on Jackson’s music, one at Mandalay Bay Hotel and Casino in Las Vegas and another that tours the world.
The Times further reports on court documents that list other disagreements between the estate and the IRS. Although the documents often refer to assets, such as a company or a trust, they don’t go into detail about them and often do not explain why the IRS disputes the estate’s figures.
For more insight into the IRS’ dispute with the Jackson estate, click here.
Article and Picture Courtesy of EUR Web