Bing Search

Music News

Michael Jackson
© AP / Michael Jackson
Michael Jackson's estate fights IRS in tax court

WASHINGTON (Reuters) -- The estate of pop music legend Michael Jackson is fighting the Internal Revenue Service over taxes and penalties levied on a wide range of the star's assets, including the Neverland Ranch, his "image and likeness" and some recording properties, according to court documents.

The estate's challenge, filed in U.S. Tax Court, does not disclose any dollar amounts, suggesting the differences in estate taxes paid and allegedly owed could be significant, said tax lawyers who reviewed the court filings on Tuesday.

The dispute centers on the value of estate assets at the time of Jackson's death on June 25, 2009. Some assets, such as the star's image and likeness, are extremely difficult to value for tax purposes.

Bing: Michael Jackson wrongful death lawsuit

Under tax law, the penalties associated with the IRS's allegations could be as high as 40 percent of the difference between the taxes paid and those allegedly owed for some of the items.

Though dollar amounts in the documents are redacted, the IRS's deficiency notice said the tax agency levied penalties on the value of Sycamore Valley Ranch Company LLC, which includes the Neverland Ranch, according to the court filings.

The IRS issued a tax deficiency notice to the estate in May, and the estate filed its challenge in tax court on July 26. The IRS has 60 days to respond to the U.S. Tax Court challenge.

Negotiators for the IRS and the estate have held meetings for more than a year to try to resolve the valuation differences, said Charles Rettig, one of the lawyers representing the Jackson estate. He declined to say how much in taxes and penalties are in dispute.

"The government believes estates of celebrities likely have a significant audit potential," Rettig said on Tuesday. "The estate believes the estate tax return properly reflected the interests of Mr. Jackson as of the date of his death."

An IRS spokesman declined to comment.

Under U.S. Tax Court rules, the Jackson estate will not need to pay any taxes or penalties unless the court rules for the IRS.

Jackson died at age 50 from an overdose of the surgical anesthetic propofol while rehearsing for a series of comeback concerts in London.

"The Michael Jackson estate was on a clear collision course with the tax court," said Bridget Crawford, a tax professor at Pace Law School, who reviewed the tax court filings.

Aug 22, 2013 12:58AM

Someone who can t take the truth deleted my post;

It s no secret that Michael Jackson was a penniless out of control junkie and PEDOPHILE

I can t believe you morons buy his products

Also , this man has no children
Aug 21, 2013 11:29PM
When your dead, you should not owe any more taxes period!  Not the dead person's fault that the IRS is incompetent and didnt collect any taxes due while he was living.  Also any estate that is left to heirs, there should be no taxes up front for inheriting the estate.. Greedy government, they already got taxes on the estate for previous years of taxes, this I would call double taxation...
Aug 21, 2013 9:24PM
Aug 21, 2013 7:14PM
Why can't the family of this dead pedophile [ thank god] just pay what they owe and stay out of the news.
Aug 21, 2013 6:02PM


Another protest on behalf of the family that deserves nothing.  They are all pathetic no talent leaches that are trying to make a dime over Michale's death.  And if he had survived, how much would he have had to paid off the remainder of the children he molested? 

Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?
more on msn music
Miranda Lambert/Pharrell Williams/Janelle Monae
See highlights from this summers' biggest current tours and festivals
Ed Sheeran: From touring with Taylor to a single with Pharrell, British troubadour navigates to pop's mainstream
Most memorable BET moments: Check out six highlights from the 2014 awards' nearly four hour event
Courtney on Kurt: His widow and Hole front woman reveals Cobain was "desperate" to achieve rock stardom
Prince reigns: The funk-rock-pop wizard reveals another full-length set ready to roll out for fans