IRS Says Michael Jackson’s Estate Owes $700 Million Plus in Taxes

The estate of pop music
legend Michael Jackson owes $702 million in federal taxes and penalties, the
Internal Revenue Service charged in U.S. Tax Court, accusing the estate of
undervaluing some of the star's assets by hundreds of millions of dollars. The
dollar amounts in dispute had not been previously disclosed in the court
challenge that the Jackson estate filed in July to a bill from the IRS, the
U.S. tax-collecting agency. At issue is the wide difference between what the
estate said Jackson's legacy was worth versus what the IRS determined was its
taxable value. An IRS spokesman and lawyers for the estate declined to comment.
Jackson died on June 25, 2009, the date of the estate tax return. His estate's
beneficiaries are Jackson's mother, Katherine, his three children, and
charities. The estate's 2009 tax filing said the total Jackson estate had a $7
million taxable value. In May, the IRS issued the estate a tax deficiency
notice for $505.1 million in taxes and $196.9 million in penalties, according
to Tax Court documents. Jackson's image and likeness were valued by the IRS at
$434 million. The estate said its taxable value was $2,105. The largest taxable
item was the estate's stake in some of Jackson's recording assets, listed as
MJ/ATV Publishing Trust interest in New Horizon Trust II, which was valued at
$469 million by IRS. It was not valued in the 2009 estate filing.

Source/more: Reuters