Tax Dispute: Michael Jackson’s Estate Tells IRS to Beat It
As long as a person has income, the Internal Revenue is likely to have an interest assessing taxes. Interestingly enough, this attitude toward taxation doesn’t necessarily end when a person passes away. If an estate has a continued income stream, then it may also be required to pay taxes on those earnings, since it is treated as a legal entity.
It’s often the case that celebrities’ estates have income years after they pass away. Just as an individual or business may become entangled in a tax dispute, the same can be said for estates. Not long ago, Michael Jackson’s estate disputed the way the IRS valued a number of assets.
Tax officials claimed that the Jackson estate didn’t pay enough taxes by issuing a notice of deficiency. According to a legal claim filed by Jackson’s estate, the IRS overvalued real estate, a car and the musician’s “image and likeness,” all of which are assets controlled by the estate.
The IRS says their valuations of the property are accurate, as they were completed by independent appraisers. At the same time, a representative for the estate maintains that the tax agency’s claims simply aren’t true.
Although this story is about a celebrity estate, it has a number of lessons relevant to many Washington, D.C., residents. A tax controversy may come down to the way in which assets are appraised. Dealing with a disparity in asset valuation can be a difficult task for an individual, however. An experienced tax attorney may be able to provide the guidance necessary to settle a dispute with the IRS.
Source:Bloomberg, “Michael Jackson’s Estate Challenges IRS in Dispute over Tax Bill,” Andrew Zajac, Aug. 21, 2013
