Taxing a dead man? Well, kind of. The Internal Revenue Service is trying to figure out just how much the image of Michael Jackson is worth.
“There’s a big disparity over Jackson’s image, as well as his recording legacy. The late singer’s estate said the taxable value of his image and likeness was $2,105 — while the IRS says it’s more like $434 million. The estate’s stake in Jackson’s recording assets was valued at $469 million by the IRS, but was not even included in a 2009 estate filing,” reports CNBC.
And get this, the IRS claims the Michael Jackson estate owes $702 million in federal taxes, plus penalties, according to charges the agency brought in U.S. Tax Court.
The agency claims the estate has undervalued the late “King of Pop’s” assets, amounts they charge were not disclosed in a court challenge the estate filed in July, as a response to a bill from the IRS.
But according to Alex Raskolnikov, a professor at Columbia Law School, who specializes in tax law, there is no exact formula the IRS uses to determine the value of assets. “When there is an audit and a valuation of substantial assets (over $50,000), they will use a panel of experts,” he told NBCNews.com.
When Jackson died on June 25, 2009, he left his estate to his mother Katherine, his three children and various charities. At the time, his estate was valued at $7 million, for tax purposes. The IRS disagrees. It said that was deficient by $505.1 million, plus penalties of $196.9 million.
A spokesperson for the Jackson estate told Reuters that the IRS figures were “based on speculative and erroneous assumptions unsupported by the facts or law.”
Thus far, the Jackson estate has covered $100 million in taxes.