The estate of Michael Jackson has a big tax problem. The IRS audited Jackson’s Estate Tax Return (Form 706) and disputed the reported value of a major asset i.e. Jackson’s image and likeness valued at $2,105; the IRS disagreed and valued it at $430million. The estate faces potentially hundreds of millions of dollars in tax, penalty and interest.
See: Protests Surge as IRS Sets Jackson Image at $430 Million: Taxes
By Alexander Ripps, Bloomberg.com (Sept 16, 2013)
The Internal Revenue Service has started using “image and likeness” as a factor in determining the value of estates of deceased celebrities, raising concern among trust and estate lawyers, Bloomberg BNA reported.
Documents recently released in litigation between the estate of pop star Michael Jackson and the IRS showed that a large part of the dispute revolves around the value of Jackson’s image and likeness. While the estate assessed the value of his image at $2,105, the IRS’s valuation was more than $430 million.
The IRS is seeking more than $700 million in tax penalties from the estate, and the government has released valuations on everything from the car to his business interests and property after a U.S. Tax Court challenge in July from the estate.