Monday, September 9, 2013
As I have previously discussed, the Jackson Estate is arguing that the IRS has overvalued Michael Jackson's assets. The estate's petition did not include any dollar amounts. Tax lawyers are claiming that the lack of dollar amounts could mean large differences in the estate taxes paid and what is allegedly owed. The dispute turns on some assets that are difficult to calculate value for tax purposes such as Michael Jackson's "image and likeness."The penalties for under valuation is as high as 40 percent.
Now the IRS is claiming that Michael Jackson's Bentley is worth $250,000 while the estate valued it at $91,600 dollars. Additionally, the IRS is asking for more than $700 million in taxes and penalties. The IRS has valued the estate at more than $1 billion dollars and is claiming that the executors of the estate did not account for much of the property leading to the serious tax deficiencies. While the IRS can determine the value of the Jackson estate based on subsequent events, the executors are permitted to value the assets based on the valuation date. The estate is claiming that the valuation of Michael Jackson's "image and likeness” is only $2,105 dollars while the IRS has determined that the value is more 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.