IRS V. Michael Jackson’s Executors Continues

As I have previously discussed, the Jackson Estate is arguing thatthe IRS has overvalued Michael Jackson’s assets. The estate’s petition did notinclude any dollar amounts. Tax lawyers are claiming that the lack of dollaramounts could mean large differences in the estate taxes paid and what isallegedly owed. The dispute turns on some assets that are difficult tocalculate value for tax purposes such as Michael Jackson’s “image andlikeness.”The penalties for under valuation is as high as 40 percent.

Now the IRS is claiming that Michael Jackson’s Bentleyis worth $250,000 while the estate valued it at $91,600 dollars. Additionally, the IRS is asking for more than $700 millionin taxes and penalties. The IRS has valued the estate at more than $1 billiondollars and is claiming that the executors of the estate did not account formuch of the property leading to the serious tax deficiencies. While the IRS candetermine the value of the Jackson estate based on subsequent events, theexecutors are permitted to value the assets based on the valuation date. Theestate is claiming that the valuation of Michael Jackson’s “image andlikeness” is only $2,105 dollars while the IRS has determined that the value ismore than $434 million dollars. 

See Alexander Ripps Michael Jackson’s Bentley Valued at $250,000 by IRS: Taxes, Bloomberg,  Aug. 20, 2013.

Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.