.

Michael Jackson Estate Facing $702 Million Tax Bill

IRS has accused keepers of King of Pop's finances with undervaluing assets in 2009

Michael Jackson
CARL DE SOUZA/AFP/Getty Images
August 26, 2013 11:30 AM ET

Though Michael Jackson's estate managed to pay off the star's massive personal debt (totaling nearly half a billion dollars) in November 2012, it's now being accused of undervaluing a number of Jackson's assets by hundreds of millions of dollars, reports Reuters. The IRS has handed the King of Pop's estate a $702 million bill for federal taxes and penalities.

Secrets of the Michael Jackson Trial: Go Inside the Controversial Case

The tax filing in question is from 2009, the year the star died at age 50 after an overdose of a surgical-grade anesthetic. That year the Jackson estate claimed $7 million in taxable value, but was issued a tax deficiency notice of $505.1 million in taxes and $196.9 million in penalties earlier this year.
The estate filed a court challenge to the bill in July.

Jackson's estate said that the artist's image and likeness were valued at $2,105, while the IRS determined the value to be $434 million. 

A representative for the Jackson estate has said the IRS's appraisal values "were based on speculative and erroneous assumptions unsupported by the facts or law." He added that the estate has paid $100 million in taxes. 

The Jackson estate will not need to pay any taxes or penalties unless the court rules in favor of the IRS's claim. 

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