Tax Court Judge Gets His Moment In Michael Jackson Case

Wall Street Journal, Taxman in the Mirror: Judge Gets His Moment in Michael Jackson Case:

Mark Holmes writes pithy tales of failed marriages and booming businesses, weaving in F. Scott Fitzgerald, historical digressions and groan-aloud puns.

Now he’s working on a much-anticipated thriller (get it?) about the late pop superstar Michael Jackson.

Mr. Holmes is no best-selling author. In fact, his work is free. Mr. Holmes is a federal judge known for the clear, colloquial writing style he brings to arcane rulings on the U.S. Tax Court.

He’s handling the final phases of the hugely complicated court case stemming from Mr. Jackson’s estate-tax return. An unusual combination of music fans and tax nerds is anticipating the end of the five-year court battle, and Mr. Holmes is poised to apply his distinctive voice to one of the most recognizable voices of the 20th century.

“The Jackson opinion could be his magnum opus,” says Randy Herndon, a former clerk.

To close watchers of the Tax Court, a Holmes opinion is instantly recognizable, opening not with a recitation of relevant statutes and precedents but with a simple story.

“The tax law is so complex that anyone who tries to make it accessible should be lauded,” said Andy Grewal, a University of Iowa law professor. ...

The IRS and Mr. Jackson’s estate have settled some differences, but they’re still about $400 million apart on the value of what he left behind, according to a recent filing. They are disputing the worth of song rights Mr. Jackson owned—his own writings and his interest in pieces like “Runaround Sue.” They’re also fighting over the extent of his posthumous right to publicity, or his estate’s ability to profit from his image.

The IRS argues that Mr. Jackson was, in fact, wealthy, despite his myriad financial problems. Mr. Jackson’s lawyers say the post-death rehabilitation of his image was no sure thing. Their point is that the estate’s marketing successes, including a movie and a Cirque du Soleil show, weren’t obvious and inevitable when Mr. Jackson died in June 2009, and that his net worth at the moment of death is what counts.

They’re arguing before a judge with a greater depth of non-tax experience than most.

Prior TaxProf Blog coverage:

• Settling Michael Jackson's Estate May Be a Thriller for the Lawyers (June 26, 2009)
• Michael Jackson's Looming "Estate Tax Disaster" (June 29, 2009)
• Michael as Elvis: Post-Death Exploitation of Jackson's Name Will Create "Money-Making Machine" to Pay Off Hefty Estate Tax Bill (July 7, 2009)
• Celebrity, Death, and Taxes: Michael Jackson's Estate (Oct. 21, 2009)
• What Is Michael Jackson's Name Worth? Estate Says $2,105, IRS Says $434,000,000 (Nov. 12, 2013)
• What Is the Value of Michael Jackson's Estate? Executor Says $7.2 Million; IRS Says $1.25 Billion (Feb. 10, 2014)
• Michael Jackson's $1 Billion Tax Court Thriller: IRS Values His Name At $434,000,000, Estate Says $2,105 (Apr. 26, 2016)
• Michael Jackson Estate's $700 Million Tax Court Thriller Turns On Value Of Star's Name At Time Of Death (Feb. 18, 2017)