Michael Jackson stirs up many good memories for me. I mean he is the Elvis of my generation. I vividly remember getting his Thriller record for Christmas in 1984 and staring at the cover with my sister. We thought he was just the coolest guy on Earth. The King of Pop, as many loved to call him, definitely peaked in the mid 80’s and suffice it to say he could only go down from there. Child molestation accusations, drug abuse, financial issues, and now tax trouble! Even in death, Jackson’s ghost still wanders the halls of the United States Justice System.
Did you happen to see that Martin Bashir documentary on Mr. Jackson? One particular scene was quite striking. It filmed Michael shopping in a high end boutique at Ceasar’s Palace in Las Vegas buying everything within sight with no concern for price or taste! He obviously spent lavishly and, by many accounts, was in major debt at the time of his death. This brings us to the latest chapter in the Jackson saga and tax topics are what we are about. Introducing: The Estate of Michael J. Jackson, Deceased, John G. Branca, Co-Executor and John McClain, Co-Executor, Petitioner(s) v. Commissioner of Internal Revenue, Respondent (017152-13 U.S. Tax Court) . In a nutshell, Jackson’s estate produced an income number to the IRS that they just could not believe or accept. According to Robert W. Wood, a tax lawyer, in his blog on the American Bar Association website:
The IRS claims that the Jackson Estate owes a whopping $505.1 million in additional taxes and another $196.9 million in penalties. The penalties are based on the taxes due, so if the tax charge is struck down, the penalties go with it. Currently, the federal estate tax law allows $5.25 million per person to be passed tax-free. But in 2009, the year Jackson died, the exemption amount was only $3,500,000.
This is shaping up to be a tax fight for the ages and a costly one at that. Nothing Jackson has done in life and death has been small and this is no different. Famous singers tangling with the IRS is nothing new. Remember Willie Nelson and most recently Lauryn Hill? Ms. Hill was convicted and even “did time” for her tax offenses. This case is different in the sense that Jackson did not evade taxes while alive. His estate is having issues and that is definitely not very surprising considering his incredible income and lavish spending. This will be fun to watch. Wily will keep you posted while I cut a little rug to P.Y.T.