As though the Michael Jackson estate hasn’t had enough difficulties, now it’s getting handed another hefty bill by the IRS. Last November, the estate paid of the singer’s personal debt, which amounted to nearly half a billion dollars, but now it’s being accused of undervaluing Jackson’s assets by hundreds of millions of dollars, according to Reuters.
The IRS is saying that the estate now owes $702 million in federal taxes and penalties. Jackson died on June 25, 2009, and his estate’s beneficiaries are Jackson’s mother, his three children and charities. The estate’s tax filing for that year said that the total Jackson estate had $7 million taxable value. In May, the IRS issued a tax deficiency notice for $505.1 million in taxes and $196.9 million in penalties to the estate.
While the estate had said the taxable value of Jackson’s image and likeness were valued at $2,105, the IRS said they were valued at $434 million. However, the largest taxable item—the estate’s stake in some of Jackson’s recording assets, which were valued by the IRS at $469 million—was not valued in the 2009 filing.
A spokesman for the Jackson estate said the IRS’ appraisal values “were based on speculative and erroneous assumptions unsupported by the facts or law.” He said that the estate has paid $100 million in taxes.
The estate will not have to pay any of the taxes or penalties unless the Tax Court rules in favor of the IRS.