The IRS has been struck by a smooth criminal. Michael Jackson’s estate still owes the Internal Revenue service about $702 million, but it’s not because they forgot Jacko passed away in 2009. It’s for a very complex, incredibly boring reason.
Ready? Let’s go.
Per charges filed by the IRS in U.S. Tax Court, Michael Jackson’s estate owes about $702 million in federal taxes in addition to penalties. The IRS claims that most of Jacko’s assets went undisclosed, meaning that the King of Pop’s financial legacy is worth a lot more than what’s on the books.
But the biggest point of contention stems from the value of Jackson’s image, which is different depending on who you ask. The estate said that his image and likeness is worth $2,105, but the IRS says the true value is closer to $434 million.
Additionally, recording assets are values at $469 million by the IRS, even though they weren’t included in the 2009 estate filing.
“Every estate wants to lowball the value of assets,” Alex Raskolnikov, a professor at Columbia Law School, who specializes in tax law, told NBC. “The amount of tax an estate has to pay is based on the value of the assets.”
There will undoubtedly be a dispute, but if Jackson’s estate doesn’t settle, “the IRS will get its experts and the family will get theirs and there will be different valuations.”
Therefore, it behooves Michael Jackson’s estate to basically pony up what the IRS is asking for.
A Jackson estate spokesperson said that they have already paid $100 million in taxes.