The estate of Michael Jackson and the IRS remain far from agreement on how much is owed.
The IRS is going to court against the estate of Michael Jackson that could put the case in the $1 billion range according to the Hollywood Reporter in the article “Michael Jackson Estate Faces Billion-Dollar Tax Court Battle.”
The tax court battle focuses on the exact value of Jackson’s name and likeness at the exact moment of his death. In other words, just how much would he have been able to get for selling them?
Right now, years after his death, Jackson’s name and image are extremely valuable. He has undergone a post death transformation. However, at the time of his death he was disgraced by accusations of child molestation.
The general, negative public opinion of Jackson at the time has led his estate to value the name and likeness at $2,105. The IRS on the other hand says they were worth $464 million.
One of the interesting aspects of this particular case is that the IRS has never before asked that estate taxes be paid for a celebrity’s name and likeness. That means it is unknown exactly where the IRS came up with the evaluation it did.
Jackson was preparing for an image rehabilitation tour at the time of his death and the IRS has sought information about corporate sponsorship of that tour. How sponsorship for one tour is extrapolated to $464 million name and likeness property value is unknown.
Needless to say, if the IRS wins this case, it will drastically change what other celebrities do with their estate plans.
Reference: Hollywood Reporter (April 20, 2016) “Michael Jackson Estate Faces Billion-Dollar Tax Court Battle”
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