Michael Jackson Estate: IRS Claims Estate Owes A Whopping $702M

The Michael Jackson estate appears to be in hot water with the IRS these days. According to TMZ, the pop icon’s estate is reportedly being accused of cheating taxpayers out of a staggering affluence. The media publication reports that the IRS is looking to recover taxes amounting to more than $700 million on profits garnered by the estate.

According to the court documents acquired by The LA Times, executors of Jackson’s estate informed the IRS that the Off the Wall singer’s net worth was approximately $7 million. However, the IRS now calculates that the Jackson estate is worth a jaw-dropping $1.125 BILLION. While the numbers may not be definitive calculations, $1.125 billion is a far cry from the insufficient $7 million that was initially reported after Jackson’s death in June 2009.

As a result of withholding vital information, the IRS has taken drastic steps to recovering the money owed to the government, doubling the initial 20 percent penalty to 40 percent. So, here’s the breakdown: The IRS alleges that the estate failed to pay the initial $505 million tax bill. Now, an additional 40 percent of the principal balance, which equates to approximately $202 million, has been tacked on to the original tax bill. In a nutshell, the Jackson estate owes more than $700 million to the IRS.

Here’s a quick comparison of the under-reported figures in contrast to what the IRS has calculated. Executors of the estate valued Jackson’s likeness at an indecipherable meager $2,105. However, the IRS has calculated that particular number to be more than an estimated $434 million.

Executors stated that Jackson had a ZERO interest in royalties for songs co-owned with the Beatles. The IRS reports that interest in royalties to be close to $469 million. Another trust within the estate was said to be worth only $2.2 million. However, that’s just what was reported as that particular trust is valued at more than $60.6 million.

Then, of course, there’s the value of master recordings for the Jackson 5 which was reportedly valued at only $11.2 million. The IRS has refuted that calculation as well, with the worth of the recordings netted at $45.5 mil.

MJJ Ventures, Inc., which was categorized under stocks and bonds, was also another reported discrepancy. The company was initially valued at only $13.73 million. However, the reported amount was actually $67.4 million less than its actual value of $81.13 million.

Its definitely safe to say the Jackson estate will be tackling this legal matter head on. However, the worst possible out come for the estate would be for the tax bill to wipe out all of the profits garnered since Jackson’s death. That particular possibility would be a grave hindrance for the Jackson’s three children who stand to inherit the emolument of the estate.

No statement has been released by the Jackson estate as of yet.