Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, January 5, 2021

IRS says Prince's estate undervalued by 50%, triggering another dispute in settlement

PrinceAccording to the IRS, executors of Prince's estate undervalued its value by 50%, which equals about $80 million. The miscalculation has lead to another dispute that could prolong the probate proceedings even further. 

The IRS has determined that PRince's estate is worth $163.2 million even though the valuation submitted by Comerica Bank & Trust claimed the value was $82.3 million. 

The IRS claims that Prince's estate owes another $32.4 million in Federal taxes, which is around double the tax bill amount submitted in Comerica's valuation. 

According to Michael Smith, an estate planning Attorney not involved in the case, there is a "large discrepancy in terms of the dollars involved and the fact that the IRS thinks the estate is worth twice as much." The IRS has also fined the estate $6.4 million for a "accuracy-related penalty." 

Comerica and its lawyers, on the other hand, claim that the estate valuations are correct. 

According to Dennis Patrick, another estate planning attorney not involved in the case, "What we have here is a classic battle of the experts — the estate's experts and the IRS' experts."

See Mike Hughlett, IRS says Prince's estate undervalued by 50%, triggering another dispute in settlement, Star Tribune, January 2, 2021. 

Special thanks to Mark J. Bade (CPA, GCMA, St. Louis, Missouri) for bringing this article to my attention. 

https://lawprofessors.typepad.com/trusts_estates_prof/2021/01/irs-says-princes-estate-undervalued-by-50-triggering-another-dispute-in-settlement.html

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