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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
76.

bob    

Great ! I hope they take it all.

174 days ago
77.

Vivian    

His likeness was valued at 2,000. WOW... That was grossly under reported and probably was what tipped them off. Elvis and Marilyn's likenesses have garnered BILLIONS over the years. MJ likeness will do the same. We're talking millions of dollars in ONE YEAR!! They need to FIRE their tax man.

174 days ago
78.

News Flash     

What happened to his Babydoll?

174 days ago
79.

News Flash     

I think he hid all his money in that Babydoll.Why else would he sleep with it?

174 days ago
80.

hotandcold    

Greedy. This family is sooo greedy. Suing for a billion dollars. Lying about MJ's worth. Seems they will lie, cheat and steal to get more and more money. What a family!

174 days ago
81.

johnny    

the whole family is a bunch of crooks...along with the irs.

174 days ago
82.

ABB    

The most pathetic attempt at tax fraud ever! Really? pay up batchez!

174 days ago
83.

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"!!!!!!

174 days ago
84.

DirkDiggler    

Scroo the government!

174 days ago
85.

Wildbill    

The whole family has been screwing the taxpayers all along!

174 days ago
86.

Michael Szatalowicz    

The IRS is the KGB.

174 days ago
87.

gregg    

"...the taxes could wipe out what the Estate has made since MJ's death ... which could be devastating for Michael's kids."

omg- they may have to actually WORK for a living!!!!

174 days ago
88.

Endgame    

I don't buy this. You guys in the US have got one of the most greedy governments in the world. Sure, on the outside it makes you think you're free, but in reality they bleed you for as much as they can get. If you don't pay they lock you up in prison. Home of the free my @ss.

174 days ago
89.

KLAW    

I think the IRS are money hungry, crooked POS! They have already been exposed. It's always about money and stickin it to people with these suckers.

174 days ago
90.

Randy    

It's just a comma and decimal point error. What difference could that make...

174 days ago
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