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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
31.

Jim    

I am SHOCKED! The executors are ATTORNEYS.
No surprise they are doing this. Just what I would expect.

260 days ago
32.

CloBird    

The IRS is desperate for money. The Jackson estate does not owe this much money.

260 days ago
33.

Inconceivable!    

The comments from people thinking MJs estate doesn't need to pay taxes is hilarious. WHO do you think pays for all the social programs that take care of the underprivileged kids MJ loved do much?!! I hope they fine the estate to high heaven for being so brazen about cheating taxes. If the IRS can get Capone on tax evasion, they can (and should) get the MJ estate!!

260 days ago
34.

Lora    

I live on my social security check so it's tough for me to have sympathy for those childen.

260 days ago
35.

Jaderyb    

Oh no! His poor devestated kids will have to live off a few million dollars! How tragic!

260 days ago
36.

elle    

Is there such a thing as having too much money? Take a look at Michael Jackson & his family. The love of money has destroyed them. Very sad.

260 days ago
37.

gegeok    

The IRS..should have caught that years ago...MJ' s value since death has increased more than folks thought..IRS is a scam!! .

260 days ago
38.

think101    

Katherine has not been the same since Michael died. I believe she is being manipulated but not by the IRS.

260 days ago
39.

frogg    

Its just said Michaels real net worth is I.125 billion 700 mil should that only be a chunk out that 1.125 mill.?.?.

260 days ago
40.

F'U    

Well of course tmz! Everyone know's that the biggest tax frauders,are those with the most money...And those in charge of the estates of the deseased are the main ones.

260 days ago
41.

Mumra the Ever Living    

On the plus side for the Jackson family, the IRS said that MJ's collection of tens thousands of baby foreskins collected from hospitals throughout the world is worth absolutely nothing.

260 days ago
42.

AAAAAAAAAAb    

Them poor kids....They will only have 300 million instead of a billion. How will they EVER survive?

260 days ago
43.

William Foresman    

Of course they cheat on their taxes!!!

260 days ago
44.

Carl    

If this is true it is monumental stupidity on the part of MJ's estate. You can't expect to have such a high profile and high value estate go unnoticed by the IRS. If you are going to fudge the numbers you need to slightly devalue these things, not cut their value by 90% or more.

260 days ago
45.

HumanNature    

TMZ


THIS IS "OLD" NEWS!!!!!!


WHERE THE HELL HAVE YOU BEEN????


OH, UNDER A DUMB "ROCK"!!!!

260 days ago
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