Tuesday, September 17, 2013
Bloomberg Businessweek: Protests Surge as IRS Sets Jackson Image at $430 Million:
The IRS may be treating celebrities like they’re worth more dead than alive.
The IRS has started using “image and likeness” as a factor in determining the value of estates of deceased celebrities, raising concern among trust and estate lawyers, Bloomberg BNA reported.
Documents recently released in litigation between the estate of pop star Michael Jackson and the IRS showed that a large part of the dispute revolves around the value of Jackson’s image and likeness. While the estate assessed the value of his image at $2,105, the IRS’s valuation was more than $430 million. The IRS is seeking more than $700 million in tax penalties from the estate, and the government has released valuations on everything from the car to his business interests and property after a U.S. Tax Court challenge in July from the estate.
The IRS valued his estate at more than $1.1 billion and said executors significantly undervalued his property, resulting in a tax deficiency of more than $505 million and additions to tax of more than $196 million, Bloomberg BNA reported.
The mere inclusion of Jackson’s image and likeness as a factor in his estate’s value is raising questions among some trust and estate lawyers. Attorney Matt Kadish of Kadish, Hinkel & Weibel in Cleveland said he’s “unaware of any cases to date that have addressed whether the value of a person’s image rights are subject to estate tax, and if so, how to value them.”