LOS ANGELES (AP) – A U.S. tax court has won a major victory at Michael Jackson’s mansion in a long battle, finding that the IRS wildly inflated the value of Jackson’s assets and image at the time of his death, leading to an inheritance tax bill. for his heirs, which was too high.
The IRS had set the value of three controversial aspects of Jackson’s value at the time of his death in 2009 at about $ 482 million. In his ruling Monday, Judge Mark Holmes put the figure at $ 111 million, much closer to the property’s own estimates.
“We are pleased,” co-author John Branka told the Associated Press on Tuesday. “We are always trying to do the right thing. We tried from the beginning to follow the rules and regulations of the IRS and relied on the best possible experts. It is a pity that we were forced to sue to defend ourselves. ”
The judge most disagreed with the IRS about the value of Jackson’s image and likeness. While the IRS set it at $ 161 million, Holmes decided it was only $ 4.15 million. He noted that despite Jackson’s acquittal on all counts during his child abuse trial in 2005, charges continued to haunt him, and while Jackson sold out dates for a planned world tour when he died, he could not find sponsor or commodity partner.
“The fact that he did not earn a penny of his image and likeness in 2006, 2007 or 2008 shows the effect these claims had and continue to have until his death,” Holmes wrote in a 271-page decision. follows Jackson’s decision. fame and finance for most of his life.
The tax battle had led to a $ 700 million bill after an audit of estate taxes in 2013, inherited by Jackson’s mother and three children, about $ 200 million of which was a penalty for non-payment.
A new tax account will now be calculated using Holmes’ data and will not include sanctions.
Jackson’s 50 percent stake in Sony / ATV Music Publishing, a catalog that includes 175 Beatles songs, was also controversial; and his interest in another catalog, which includes the songs he wrote.
The IRS expert had amassed these assets totaling about $ 320 million. The judge found that Jackson’s debts together were worth only $ 107 million at the time of his death.
The solution, awaited for years, resolved one of the few disputes still hovering over Jackson’s mansion nearly a dozen years after his unexpected death on June 25, 2009, after a lethal dose of anesthetic propofol.
Another was decided a week earlier when a judge dismissed a lawsuit filed by choreographer Wade Robson, one of the two men included in the 2019 documentary Leaving Neverland, which claims Jackson raped him as a child. A similar lawsuit by James Seifchuk, the other man involved in the documentary, was rejected in October. The men’s lawyer called the decisions a dangerous precedent for protecting children and said they planned to appeal.
With clear years of controversy and a forced pandemic slowdown in project picking, the manor leaders feel like a great place to start re-promoting Jackson’s legacy.
“We are at an absolute turning point,” Branca said. “I think people have realized that Michael is innocent of any charges and can’t defend himself. We have a wonderful play on Broadway ahead of us, we will soon reopen our show Cirque du Soleil and some surprises are coming. ”
The judge noted the huge success the mansion had seen since Jackson’s death through such shows, a hit concert film and several strategic asset sales decisions.
According to him, however, the IRS seems to take these successes into account in its decisions, instead of taking into account only the circumstances at the time of Jackson’s death, when things were significantly darker after several years of declining popularity, mismanagement and reckless spending by Jackson.
The judge mocked the initial valuation of Jackson’s image and resemblance to the mansion at just $ 2,000, saying he put “one of the world’s most famous celebrities – the king of pop” at the price of a heavily used 20-year-old Honda Civic. “
Follow AP Entertainment writer Andrew Dalton on Twitter: https://twitter.com/andyjamesdalton