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Michael Jackson Estate

Targeted by IRS

Shocking Tax-Cheating Allegations

2/8/2014 9:08 AM PST BY TMZ STAFF
breaking news

0207-michael-jackson-irs

The Michael Jackson Estate is in the crosshairs of the IRS for allegedly cheating taxpayers out of a fortune ... and now the taxman wants the Estate to pay the piper -- to the tune of more than $700 million.

The allegations are stunning.  According to legal docs -- obtained by the L.A. Times -- when Michael died the executors told the IRS his net worth was around $7 million.  The IRS now says MJ's net worth was actually $1.125 BILLION

And in a HIGHLY unusual move, the IRS claimed executors so grossly misled the agency, it doubled the tax penalty -- from 20 - 40%.  So the IRS claims the Estate didn't pay $505 million worth of taxes, and when you add the 40% it comes to more than $702 Million.

As for what the agency says was under-reported:

-- The Estate valued MJ's likeness at $2,105. The IRS says the value is actually more than $434 million.
-- The Estate valued Michael's interest in a trust that owns songs by MJ and the Beatles at ZERO!  The IRS says its more like $469 million.
-- There's another MJ trust the Estate claims is worth $2.2 mil.  The IRS says it's worth $60.6 mil.
-- The Estate valued the Jackson 5 master recordings at $11.2 mil.  The IRS says $45.5 mil.

It's pretty clear the Estate will fight this like crazy, but worst case scenario the taxes could wipe out what the Estate has made since MJ's death ... which could be devastating for Michael's kids.

We contacted a rep for the Estate who says they stand by their initial statements on the matter ... telling us, "The Estate of Michael Jackson disputes the IRS position in its entirety."

The rep adds, "The Estate used independent, nationally-recognized and highly-qualified expert appraisers in determining the value of the Estate’s assets. By contrast, the IRS consultant’s values are not based on standard appraisal methodology, but rather are speculative and erroneous assumptions unsupported by the facts or law. The Estate has paid over $100 Million dollars in taxes and is in full compliance with the tax laws."

297 COMMENTS

No Avatar
136.

Dee Dee    

The IRS department is not even officially legal. There is nothing in the constitution that mentions any IRS. And they are accountable to no one. And if they decide you owe a million or a billion dollars there is nothing you can do to fight them..they will go after anything you have until you are broken..it pays over pay your taxes or just be dirt poor and rely on welfare and benefits.

201 days ago
137.

Fugitive351    

Get the whole FU%^in thing!!!!!! .Sneaky mother FU$%er... deserves it all gone!!!!

201 days ago
138.

BTDT    

What the IRS doesn't take, the lawyers will.
The kids are screwed.

201 days ago
139.

Lucas    

the people in power behind the "IRS" everything Jewish. America is a country robber and greedy with a taxes

201 days ago
140.

Tssays    

This is beyond comprehension!! The IRS targeting conservative groups YES, BUT BROTHER ON BROTHER??

What will be next the IRS investigates Rahm Emmanuel??
:-(??

201 days ago
141.

studio42    

Greed. One of the Seven Deadly Sins... and there goes the families nest egg.....shameful the way Dr Conrad and MJ's family...shame in you.

201 days ago
142.

Jim    

I cant believe I took the time to read this. Who gives a crap about him or his kids

201 days ago
143.

Marcus    

The IRS need to be done away with and all the people that work for them be given a brand on their forehead telling the rest of the world that they are low lifes and are unemployable.

201 days ago
144.

RogTos    

Nahh your kidding me. Next thing your gona say that the family has leeches and there is a whole contrived conspiracy and those honest lawyers on tv are our advocates!

201 days ago
145.

RogTos    

Let the IRS rape his estate and assests hidden by his convoluted family. Pay back is a bitch.

201 days ago
146.

Jay Love    

my guess is the catalog was at a zero value, given Micheal only owned 50% of those songs with Sony Music and he had a bad habit of borrowing off the value every few years to raise cash to live off of and pay the bills? up to his death the value had been eaten up with liens for loans against it. his assets didn't begin to rise dramatically until many months after his death? so yea at the time of death all those assets were worth little at the moment?

201 days ago
147.

elena    

Obviously no one posting here has ever paid significant sums to the government. **** THEM. why do they deserve jack???

201 days ago
148.

BB not bb    

This all sounds subjective. The likeness of Michael Jackson? How can you prove a monetary value on that? I think the IRS is getting greedy. They act like thugs any more, showing up armed to control people who are out of sinc with the feds. Now you have three innocent kids, one who said she is not for the Illuminati, and they are set to come of age to control this vast fortune. I don't think the rich people like others who aren't in their clique to be rich also.

Look at what they did to Martha Stewart. She had to go to prison for their twisted up charges against her. The estate lawyers seem really smart. I hope they do fight back and teach the IRS a lesson.

201 days ago
149.

TaxGrab    

Under the Fair Tax Act, this would not have been possible in the first place. Look t up in Wikipedia. Write your senators and congressmen.

201 days ago
150.

TaxGrab    

The IRS can be done away with. There is a bill in both Senate and House called The Fair Tax Act that does this. Look it up in Wikipedia.

Write your Senators and Representatives!

201 days ago
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