Michael Jackson’s children have been given a “huge, unambiguous victory” in their deceased father’s estate’s legal conflict with the IRS (Internal Revenue Service).
The suit originated from a dispute about how much Jackson’s name and likeness were worth at the time of his passing in 2009.
The IRS determined the value to be $162 million while Jackson’s estate claimed it was more like a piddling $2,105, due to the harm caused to his name by child molestation allegations.
The IRS had asserted that Jackson’s estate had underpaid its tax bill by nearly $500 million, and could possibly owe an extra $200 million in fines, due to their appraisal of the late star’s worth.
But, Judge Mark Holmes of United States Tax Court recently decreed that Jackson’s name and image were worth $4.2 million, saying: “We have to look for the value of each of Jackson’s assets. The value we put on them as of the day he died is, we acknowledge, much less than their value much later under the estate’s management.
“We make no particular judgment about what Jackson did or is alleged to have done, but we must decide how what he did and is alleged to have done affected the value of what he left behind.”
Replying to Holmes’ ruling, John Branca and John McClain, co-executors of the Jackson estate, described it as “a huge, unambiguous victory for Michael Jackson’s children.”
“For nearly 12 years Michael’s estate has maintained that the government’s valuation of Michael’s assets on the day he passed away was outrageous and unfair, one that would have saddled his heirs with an oppressive tax liability of more than $700 million,” they said. “While we disagree with some portions of the decision, we believe it clearly exposes how unreasonable the IRS valuation was and provides a path forward to finally resolve this case in a fair and just manner.”
The estate’s tax bill will immediately be based on the $4.2 million sum determined by Judge Holmes.
Judge Holmes also decided the value of Jackson’s piece of Sony/ATV Music Publishing, the corporation that controlled millions of song copyrights — including the bulk of the Beatles’ catalog — and Mijac Music, another catalog he owned.
The estate had put its value at $5.3 million. Judge Holmes ruled their cumulative worth was $111.5 million.
In 2016, Sony/ATV — presently known as Sony Music Publishing — agreed to pay the Jackson estate $750 million to acquire its share of that catalog.