IRS Wants $702M From MJ Estate

The IRS has told Jackson’s executors that the estate owes $505 million in back taxes and another $197 million in penalties, according to the Los Angeles Times.

Documents filed with the U.S. Tax Court reportedly show there’s a major difference of opinion between Jackson’s executors and the tax man.

Jackson was worth slightly more than $7 million at the time of his June 2009 death, according to his executors.

However, the IRS placed it at $1.125 billion, the Times reports.

So inaccurate was Jackson’s return, the IRS said it qualified for “gross valuation misstatement” penalty, which allows the government to double the usual 20 percent penalty for underpayment.

“I’ve never even heard of the gross valuation misstatement penalty being asserted,” estate tax expert Andrew Katzenstein told the paper.

Other areas of vast disagreement between the Feds and the estate include the value of Jackson’s image and his interest in the trust that holds the rights to some of his songs and most of The Beatles’ catalog.

The estate reportedly valued Jackson’s image at a meager $2,105. The IRS put it at $434 million.

The estate reported Jackson’s interest in the trust that owns the music catalog at zero.

The IRS put it at $469 million.

Part of the discrepancy regarding the catalog stems from testimony from a certified public accountant during MJ’s wrongful-death suit last year that Jackson had taken a $320 million loan against the catalog.

Experts told the Times that it was hard to comprehend how someone could price a catalog with some of the world’s most memorable songs at zero and think the IRS wouldn’t take issue.