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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
46.

Rigby    

Lmao IRS is after everybody this year. Good! Pay your taxes like the rest of us.

193 days ago
47.

Lil-za    

Ai karamba!

193 days ago
48.

James25    

I wonder why the estate valued Michael's financial interest in the Beatles Catalog at 0. Was this because Michael used the Beatles Catalog as collateral to secure loans and therefore the bank technically owned it?

193 days ago
49.

Stacy    

Hmmm. :-(

193 days ago
50.

S D M F    

Serves the Jackson family leaches right!!
The Jackson family have to milk this estate dry and to hell with MJ's children. I hope the IRS get every penny and refuses to settle!

193 days ago
51.

Dave    

Since Michael was almost broke when he died, who is the genius at IRS who sets these ridiculous estimated values?
You can't tax someone on what their potential earnings are, just their actual current earnings.

193 days ago
52.

notalawyer    

I'm sure this was just an "oversight" and anyone from the Jackson estate will be happy to "correct any errors" and pay the IRS what they owe...

193 days ago
53.

Mr Barcliff    

its sick to go after MJ's estae after hes dead to get $!

193 days ago
54.

Patrick Prophylactic    

And we voted to allow the IRS to enforce Obamacare by not only electing him once but twice. People the free stuff can't last. Wake up!!!

193 days ago
55.

HumanNature    

I'M QUITE SURE THE ESTATE VALUE MJ NET WORTH AT THE TIME OF HIS DEATH AS IN 'DEBT"!!!!!


However, the estate has a legitimate argument that the meteoric rise in Jackson’s fortunes after his death couldn’t have been foreseen. Future payments to the estate for Jackson’s continuing sales are valued for federal estate tax purposes by the projected future worth discounted to present value. Those calculations aren’t easy when the subject’s earnings have fluctuated wildly.


http://wealthmanagement.com/estate-planning/trust-me-michael-jackson-still-paying-taxes


WATCH THE GREEDY IRS "COMPROMISE"!!!!!!

193 days ago
56.

kar906362    

The irs is a greedy s.o.b that takes money away from the people that have actually earned it so they can pay their own debt. What a shame what this world has come too. Learn to pay your own debts instead of stealing it from everyone else.

193 days ago
57.

HumanNature    

MJ ESTATE FUTURE EARNINGS ARE "NOT STABLE" LIKE ELVIS, MARILYN MONROE AND OTHERS DEAD CELEBRITIES!!!!!!


IRS IS "BARKING" UP THE WRONG TREE!!!!!

193 days ago
58.

KicksandGiggles    

This is called Lawyer Wood. A mess to straighten out getting lots of juicy billing hours. I hope the IRS gets whatever is truly due - just like the rest of us pay. And if it wipes out the estate, tell MJ kids to get off their little azzes and get a job and move on.

193 days ago
59.

HumanNature    

WE THE PEOPLE SHOULD MAKE THE PEOPLE WHO WORK FOR THE GOVERNMENT PAY US BACK OUR $$$$$$$$$ THAT THEY HAVE STOLEN AND F@CKED UP OVER THE YEARS!!!!!!!!

193 days ago
60.

Mal    

The guy was a habitual child molesterer....why would something like this shock anyone. All our kids are safer with him dead.

193 days ago
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