Estate of Michael Jackson v. IRS

On July 26, 2013, the IRS sent a notice ofdeficiency to the Michael Jackson estate. The estate had reported a $7 million taxable value of the estate’sassets, including a paltry $2,105 valuation of the King of Pop’s name andlikeness.  The IRS valued the name andlikeness at over $434 million and the entire estate at over $1.1 billion.  The notice of deficiency demands over $505million in estate taxes.  The IRS alsotacked on an additional $196 million, contending the executors significantlyundervalued the estate’s property.

In response to the IRS notice, the estate filed apetition with the U.S. Tax Court, contending its valuations of assets wasaccurate and based on qualified appraisals. The IRS responded by detailing all of the proposed IRS valuations of MJ’sassets, including his name and likeness.

Since the King of Pop died, his estate hasgenerated hundreds of millions of licensing dollars, which the IRS hasundoubtedly factored into its valuation. The disagreement over the estate’s valuation has set the stage for acontentious legal battle. 

SeeMichael R. Morris, Michael JacksonEstate’s Valuation ($2,105) Vs. IRS’ MJ Valuation ($434 Mil.), Billboard, Nov. 11, 2013.

Special thanks to Paul L.Caron (Pepperdine University School of Law, Editor of TaxProf Blog) forbringing this article to my attention.