Michael Jackson’s Family Locked Out of Trust Amid $700 Million IRS Dispute
Michael Jackson’s family has found themselves at an impasse regarding access to the late pop icon’s trust fund. The reason? A colossal $700 million dispute between the IRS and Jackson’s estate over the valuation of his assets.
According to recent court documents, Jackson’s mother, Katherine Jackson, and his three children—Paris, Prince, and Bigi—are temporarily frozen out of their trust fund. This freeze will remain in place until the ongoing dispute with the IRS is resolved. The core of the issue lies in the IRS’s audit, which concluded that the estate had significantly undervalued its assets. As a result, the IRS claims that the estate owes an additional $700 million in taxes and penalties.
This dispute isn’t new. The battle began in earnest back in 2021 when the IRS issued a “notice of deficiency” following their audit. The estate, steadfast in their stance, contested the IRS’s claims and initially emerged victorious in tax court. However, the saga did not end there. The estate took the further step of requesting a revaluation of Jackson’s lucrative music catalog, known as Mijac, a move that has prolonged the resolution process.
Adding another layer of complexity, the trust stipulates that 20 percent of the estate’s value—calculated for federal estate tax purposes—must be allocated to charity before any funds can be distributed to the beneficiaries. This stipulation has contributed to the delay, as the exact value of the estate remains under contention.
While the executors of Jackson’s estate work through these legal and financial quagmires, they are also seeking a way to establish a “family allowance” to support the beneficiaries during this interim period. Despite the current freeze, Katherine Jackson has received substantial support from the estate over the years, amounting to over $55 million since Jackson’s untimely death in 2009.
The unresolved dispute with the IRS leaves Jackson’s family in a precarious position, unable to access the trust fund meant for their financial security. Fans and onlookers alike watch closely as this high-stakes legal battle unfolds, hoping for a resolution that will ultimately honor the King of Pop’s legacy and provide for his loved ones.
For now, the Jackson family must wait, their financial futures hanging in the balance as the IRS and the estate navigate the complexities of this monumental tax dispute.
What do you think Xtralites? Should Michael Jackson’s family pay the price for this error?
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