We’ve been able to avoid the whole Michael Jackson debacle up until now. We couldn’t, in good blogging conscience, avoid this particular story.
The estate of Michael Jackson is probably going to have to turn over at least $80 million to the IRS and they get to cut the line right to the front to collect.
“As in a bankruptcy case, Jackson’s creditors will jockey for first crack at his fortune. But the estate’s initial obligation will be to pay the late star’s taxes, said Beth Kaufman, a Washington-based attorney specializing in estate tax issues. ‘There is no question that the U.S. government has first priority,’ she said.
Oh, and the Service is not going to take the royalty rights to She Loves You or I am the Walrus either:
To settle his tax bill, the executors of his estate may have to sell or borrow against lucrative but hard-to-value assets or ask the IRS for a multi-year extension. That could allow the estate to pay the tab over time with earnings from Jackson’s share in rights to songs by the Beatles and his own music — prized properties whose value will likely make the estate’s tax bill only bigger. “The government is not going to take a Beatles record as payment. They want to be paid in cash,” said Roy Kozupsky, a veteran estate lawyer in New York who has worked on behalf of several wealthy clients.
Reportedly, Jackson still made $40 million a year from his ownership of the recordings. This will no doubt make the calculation of the tax bill more complicated and thus, we’ll continue to be saturated with all the excruciating details about this story that we just don’t want to hear.
Death and taxes: Big IRS bill looms for MJ estate [AP via TaxProf Blog]