Los Angeles, Feb 11 (IANS) The executors of Michael Jackson's estate have hit back at the IRS for launching a legal battle in a bid to secure $505 million and an additional $197 million in penalties.
US Internal Revenue Service (IRS) officials have opened a case against the estate of Michael Jackson, claiming that the singer's assets were grossly undervalued following his death in June 2009 and that the executors of his estate owe almost three quarters of a billion dollars, reports femalefirst.co.uk.
One point of contention is the original valuation of the pop star's interest in a trust that includes the rights to some of his biggest hits and most of "The Beatles" back catalogue was valued at zero, while the IRS claimed it was worth $469 million.
Sources told TMZ that zero was put on the tax return because Michael and Sony were 50/50 partners in the catalogue which had a total net value of $800 million.
They claim Michael borrowed $320 million against the catalogue and owed another $200 million in personal debt, so they balanced his $400 million share out at zero.
The estate also believes the IRS is off base when it comes to Michael's likeness and images, which they valued at a mere $2,105 at the time of his death compared to the IRS's $434 million valuation.
They insist the King of Pop had made no money from his image in the 15 years running up to his death because his popularity had been diminished by child sex abuse allegations.
The estate is also claiming the Jackson 5 music collection is worth $11.2 million and not the $45.5 million the IRS is suggesting.