Michael Jackson's estate penalised in multi-million dollar tax battle with IRS

According to documents obtained by the Los Angeles Times, there is a huge gap between executors’ valuation of the Jackson estate and what has been calculated by government auditors. The estate claimed that when Jackson died in June 2009, his net worth was a mere $7m (£4.3m). The IRS (Internal Revenue Service) came to a figure about 160 times higher: $1.125bn (£76m). The difference is so big that the IRS has allegedly given the submission a gross valuation misstatement penalty, entitling it to an extra 20% in fines.Although it is well documented that Jackson was in debt at the time of his death, the singer still had huge financial resources: rights to his own back catalogue, rights to his likeness and name, plus the publishing catalogue for artists including the Beatles, Hank Williams and Eminem.The Jackson estate is accused of undervaluing these holdings. Whereas the IRS pegged the value of the singer’s likeness at $434.3m (£264.7m), executors claimed that it was worth just over $2,000 (£1,200). Jackson’s stake in Sony/ATV Music Publishing – worth an estimated $469m (£285m), according to officials – was reportedly valued at “zero” dollars.The Jackson estate is also accused of skimping on its valuations of stocks, Rolls-Royces and master tapes for the Jackson 5. While reps have yet to comment on the case, executors for the Smooth Criminal star have reportedly hired “top tax litigators” from the Los Angeles firm Hochman, Salkin, Rettig, Toscher & Perez.(theguardian.com)ANN.Az