Even in death, Michael Jackson remains controversial. Jackson's estate is still battling with the IRS, almost five years after The King of Pop's death. Read an excerpt from the Forbes articles below:
"It’s possible that the legacy of Michael Jackson could turn out to be a string of court cases. He has kept lawyers and business managers happily employed since he died – and his tax lawyers are no exception. The estate for the King of Pop is planning to go to the mattress in the fight against the Internal Revenue Service over taxes and penalties assessed as a result of values reported on his federal estate tax return.
Michael Jackson died on June 25, 2009, in Los Angeles, California. The federal estate tax exemption amount was $3,500,000 for decedents dying in 2009. That means that estate assets in excess of that amount are taxed.
For federal purposes, estate tax is calculated on the net value of the assets in the control of the decedent as of the date of death. There is an election available to use the values as of six months after the date of death, as well. That election is referred to as AVD, or alternate valuation date, and is intended to account for the potential drop in the value of a decedent’s estate due to fluctuations in the market or a drop in the value of the businesses owned by the decedent. That drop can happen to ordinary taxpayers like you and me but it’s not the case for Michael Jackson who remains firmly near the top of Forbes’ list of Top Earning Dead Celebrities.
Taxes payable as a result of the death of the decedent are the responsibility of the estate. Even though Jackson’s will requires most of the taxes due to be paid out of his trust, the executors of the estate are legally responsible for filing and arranging for the payment of taxes. That’s why, as a practical matter, the estate is suing the IRS. The case has been captioned (after an August 14, 2013 amendment) Estate of Michael J. Jackson, Deceased, John G. Branca, Co-Executor and John McClain, Co-Executor, Petitioner(s) v. Commissioner of Internal Revenue, Respondent (017152-13 U.S. Tax Court) and was filed in U.S. Tax Court.
So why all the fighting? Jackson’s estate was said to have been valued between $80 million and $500 million. That’s, er, a lot of disparity. And that’s exactly the problem."
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