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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
121.

DougDiPlacido    

We all know that the IRS is a totally honest entity and would never make a mistake of this porportion so it has to be a valid claim. Just cut them a check and be done with it.

167 days ago
122.

Jennifer    

I think that is why too much money for the IRS to charge. Okay, charge some more but let the kids have some money too.

167 days ago
123.

kimbo    

We all have to pay taxes I guess the Jackson estate has to pay there fair share just like any body else.

167 days ago
124.

HumanNature    

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.


HEY DUMB ASS IRS


MJ ESTATES VALUE HIS ASSETS AT THE TIME OF HIS DEATH AS IN "DEBT"!!!!!

( - ) = NEGATIVE!!!!!


MU ESTATE FUTURE EARNING ARE NOT "STABLE" LIKE ELVIS AND OTHER DEAD CELEBRITIES!!!!


MJ ESTATE IS IN COMPLIANCE WITH THE FEDERAL ESTATE TAXES!!!!


"GREEDY" IRS DO NOT HAVE A CASE!!!!!

167 days ago
125.

Crabby    

who cares about the dead pedophile???

167 days ago
126.

mike    

Take it all...take every cent and leave the pigs nothing but receipts. Let them all die in poverty for the pedophile spawn they loosed on the world

167 days ago
127.

mike    

Take it all...take every cent and leave the pigs nothing. Let them all die in poverty for the pedophile spawn they loosed on the world.

167 days ago
128.

Justine07    

Even if the children end up with "just" a few million dollars after all the potential lawsuits, are we supposed to feel sorry for them because they might have to actually get a job like the rest of us average schmucks? We're struggling to put our oldest son through college to earn a degree in accounting, I guarantee he could invest a million dollars to make it last for decades, and donate to many charities at the same time... Sorry but no sympathy here.

167 days ago
129.

Eye roll     

I thought he was bankrupt and crap. Too bad us regular people have to pay taxes too.

167 days ago
130.

thedash    

I only want it to wipe out the estate (yeah right, it's publishing and MJ..mo money,mo money) so those spawned kids will have to get ****in' jobs. Little entitled asses.

167 days ago
131.

mike    

Take it all...take every cent and leave the pigs nothing. Let them all die in poverty for the pedophile spawn they loosed on the world.

167 days ago
132.

Jeff    

IRS has gotta go. We need the fair tax. Get rid of all taxes from Property taxes to incometaxes just have the fair tax. I'm tired of the government squandering my hard earned money.

167 days ago
133.

Barb    

Why am I not surprised the IRs would get involved. Good way to pay off the national debt.

167 days ago
134.

Joe    

Tax-Cheating? I believe it's called tax evasion.

167 days ago
135.

TEK    

I agree with the IRS with MJ net woth over 1 billion as opposed to 7 million. But not sure about the rest.

167 days ago
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