U.S. tax court hands victory to Michael Jackson’s heirs

A U.S. tax court awarded the Michael Jackson estate a major victory in a multi-year battle, finding that the Internal Revenue Service (IRS) had dramatically inflated the value of the singer’s assets and image at the time of his dead.

The IRS had valued three disputed aspects of Jackson’s worth at the time of his death in 2009 at around $ 482 million (£ 347.4 million).

In his ruling on Monday, Judge Mark Holmes put the figure at $ 111million (£ 79.9million), much closer to the domain’s own estimates.

Estate executors said it was a huge and unambiguous victory for Jackson’s children.

“We are delighted,” co-executor John Branca told The Associated Press.

“We are always trying to do the right thing. We tried from the start to follow the IRS rules and regulations, and relied on the best possible experts. It is unfortunate that we have been forced to advocate to protect ourselves. “

The judge disagreed most with the IRS over the value of Jackson’s image and likeness. While the IRS put it at $ 161million (£ 115.9million), Mr Holmes ruled it was only $ 4.15million (£ 2.99million). ).

He noted that despite Jackson acquitting himself on all counts in his 2005 child assault trial, the allegations continued to harass him, and as Jackson sold dates for a world tour scheduled for his death. , he could not find a sponsor or business partner.

Mr Holmes wrote in his ruling: “The fact that he didn’t earn a dime from his image and likeness in 2006, 2007 or 2008 shows the effect these allegations have had and have continued to have. to his death.”

The tax fight had resulted in a bill of around $ 700million (£ 504million) after a 2013 tax audit on the estate, whose heirs are Jackson’s mother and her three children, of whom around 200million of dollars (144 million pounds). penalty for underpayment.

A new tax bill will now be calculated from Mr Holmes’ numbers, and it will not include any penalties.

Jackson’s 50% stake in Sony / ATV Music Publishing, a catalog that includes 175 Beatles songs, was also in dispute; and his interest in another catalog that includes the songs he wrote.

Michael Jackson seen shortly before his death in 2009 (AEG Live / PA)

The IRS expert had valued these assets at a combined total of around $ 320 million (£ 230.4 million). The judge concluded that with Jackson’s debts the two combined were only worth $ 107million (£ 77.4million) at the time of his death.

The decision, overdue for years, resolves one of the few disputes that still hung over Jackson’s estate nearly a dozen years after his unexpected death on June 25, 2009, after a lethal dose of the anesthetic propofol.

Another was resolved a week earlier when a judge dismissed a lawsuit brought by choreographer Wade Robson, one of two men featured in the 2019 documentary Leaving Neverland, who alleged Jackson assaulted him sexually in her childhood.

The similar lawsuit of James Safechuck, the other man featured in the documentary, was dismissed in October. The men’s lawyer called the decisions a dangerous precedent for the protection of children and said they planned to appeal.

With years of disputes resolved and a pandemic-forced delay in lifting projects, leaders in the field feel in an excellent position to resume promoting Jackson’s legacy.

“We are at an absolute turning point,” said Mr. Branca.

“I think people realized that Michael was innocent of any accusation and unable to protect himself. We have a wonderful Broadway play, we will be reopening our Cirque du Soleil show soon, and we have some surprises coming up.


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