Paul L. Caron

Saturday, February 18, 2017

Michael Jackson Estate's $700 Million Tax Court Thriller Turns On Value Of Star's Name At Time Of Death

ThrillerWall Street Journal, Michael Jackson’s Estate Faces Demand for Big Tax Payment: Dispute With IRS Centers on Valuation of the Singer’s Name and Likeness Rights at Time of His Death:

When pop star Michael Jackson died in 2009, weeks before a planned comeback tour, how much was the man in the mirror worth? The answer is far from black and white.

After coming to agreements on the value of some of the King of Pop’s more concrete assets in a legal fight that began four years ago, the estate’s executors are facing off with the Internal Revenue Service in U.S. Tax Court on Monday, primarily over the valuation of the singer’s name and likeness rights at the time of his death.

Depending on the outcome of the case, the estate could be on the hook for more than $500 million in taxes and $200 million in penalties, according to the IRS’s notice to the estate of its deficiency.

The estate said it considered his name and likeness essentially worthless, valuing it at $2,105, as Mr. Jackson’s reputation was then tainted by child-abuse allegations and his strange public behavior. ...

But the IRS argues that the pop star’s name and likeness should have been valued at $161 million; that would be down from 2013, when it valued those rights at $434 million. ...

Los Angeles entertainment attorney Mitra Ahouraian said that if the IRS prevails, it is likely to pursue other celebrity estates for additional taxes on their name and likeness rights.

Previous TaxProf Blog coverage:

Celebrity Tax Lore, New Cases, Tax | Permalink


If William Shakespeare were still around & writing plays, he'd discover finally what's in a name!

Posted by: Joseph W. Mooney III | Feb 19, 2017 1:32:30 PM