IRS Wants $500 Million In Taxes From Michael Jackson’s Estate

The IRS says the pop star's estate was grossly undervalued

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WireImage / WireImage

Michael Jackson in May, 2008.

The King of Pop may have passed, but debates over Michael Jackson’s life and death are alive and well. The latest: how much is Michael worth?

His estate says $7 million, but according to the Los Angeles Times, the Internal Revenue Service disagrees. The agency says Jackson’s estate is actually worth $1.125 billion — and has told his executors to pay up $505 million in taxes, and $197 million in penalties.

But the question of valuing intangible inheritances isn’t just “black or white”. Much of the debate over the pop star’s estate arises from the value of Jackson’s image. How lucrative a source of income is a dead celebrity’s likeness when used in T-shirts and television commercials? His estate has valued it at just $2,105, while the IRS has put it at just over $434 million, reports the Times.

A separate question in valuing Jackson’s estate is his interest in a trust that includes the rights to some of his songs and some of the most famous Beatles songs, including “Yesterday,” “Sgt. Pepper’s Lonely Hearts Club Band” and “Get Back.” The IRS valued that at $469 million; the estate valued it at nothing.

“This is something unusual,” Katzenstein said. “He was one of the premier entertainers of our time. So there are really no comparables, and it leaves the valuation question open to a huge range of possibilities. Do I think his likeness was worth $2,105? No. But was it worth $400 million?”

The IRS’s estimate of the Jackson estate as being worth $1.125 billion comes along with a 20% penalty for undervaluation, after Jackson’s executors priced him at $7 million after his June 2009 death.

As the case unfolds in court, the Jackson estate may pay off its taxes by selling assets or asking the IRS if it could pay over 15 years, the L.A. Times reports. We’ll see if the IRS “can’t stop until it gets enough.”

[LAT]

12 comments
Openminded1
Openminded1

The wannabe white/black man pedophile little boy penis loving pervert and is dumb ass racist family who lived off his money, deserve the wrath of the IRS.

brettsmithton
brettsmithton

FIRST TIME i am ever ROOTING for the IRS!!! YES...TARGET this RACIST PEDOPHILE's FORTUNE...and than his SCUMBAG FAMILY will HAVE TO SELL THE BEATLES RIGHTS BACK TO SIR PAUL and/or RINGO!!!!!!!!

MarkTate
MarkTate

The Beatles catalog worth $0?  They are so screwed...

juneyny
juneyny

Am I missing something?  Estate is supposed to be valued as of the date of death, not the date on which a successful estate rakes in millions of dollars for the beneficiaries.  As for valuing Michael's portion of the Beatles catalog, this asset is held in a remote trust for the benefit of his children.  Whether it can be so protected from the IRS' inevitable reach remains to be seen.

fafoxy11772
fafoxy11772

The biggest thieves in the history of the world is the IRS.  It should be abolished, and replaced with a national sales tax.  Nearly all states collect sales taxes, and so those states already have the machinery in place to collect tthese taxes.  Each state could simply add an additional 16% federal sales tax, and forward the money to the federal government.  It doesn't get much simpler than that.

StephenGrange
StephenGrange

I see the same financial professionalism that Jackson exhibited during life extends into his death.....They painted a target onto themselves but watch the rubes swarm to defend this crap.

Angie2121
Angie2121

@MarkTate

MJ had more assets than just the cat...which also contained many other artists - as well as MJ's own work and not just the Beatles. That doesn't include all the other assets in large warehouse's - which also store numerous classic cars, paintings, etc.

Angie2121
Angie2121

@StephenGrange

Don't get exactly what you mean? MJ hired and paid financial advisers/accountants to do the work they trained and studied for - while MJ did the work he recorded and rehearsed for...Or am I reading your comment wrong?

Openminded1
Openminded1

@Angie2121 @StephenGrange  he paid accountants to find ways to beat the IRS, remember those alleged pro's did what he wanted since he was paying big bucks.

brettsmithton
brettsmithton

@Angie2121 @StephenGrange  I think you forget ANGIE that JACKSON was a PEDOPHILE...worse a SERIAL PEDOPHILE who BOUGHT his NOT GUILTY....and also he was a ENTERTAINER and a SINGER NOT a STELLAR MUSICIAN....(unlike the beatles the greatest musicians ever) HELL if it wasnt for the MASTER QUINCY JONES and TOTO....THRILLER wouldnt EXIST.....

BryanAlexander
BryanAlexander

Why are you so filled with hate? It will only destroy your soul. Please try to send love forward. You will find it very rewarding. :-)