by Jeroslyn JoVonn
June 4, 2024
Michael Jackson’s estate has an ongoing dispute with the IRS that is holding his mother and children back from receiving trust fund money.
There’s a dispute brewing between Michael Jackson’s estate and the Internal Revenue Service (IRS) that is preventing the late singer’s mother and children from receiving funds.
Executors of the late King of Pop’s estate say his mother, Katherine Jackson, and his three children, Paris, Prince, and Bigi, cannot receive their trust fund money until the estate resolves an ongoing dispute with the IRS, People reports. The estate filed on Tuesday, May 28, clarifying that while the beneficiaries can’t receive the funds, it does not impact the money they will be allocated once the dispute is settled.
Jackson’s mother and children still receive an allowance through the singer’s estate. Katherine is a life beneficiary who has received over $55 million since the singer’s 2009 passing.
“In annual reports provided to the probate court, which are publicly available, anyone can see that the Estate provides Michael’s mother and children with very substantial amounts of money to support them,” a statement from the estate reads.
“The Estate has a very cooperative relationship with Michael’s children and whenever they need anything, the Estate works with them to ensure that they are very well taken care of, just as Michael would have wanted.”
The dispute is a result of an IRS audit of the estate’s federal tax return, which prompted the IRS to issue “a note of deficiency” claiming that the estate “undervalued its assets” and owed “an additional $700 million in taxes and penalties,” according to the filing. The estate disputed the findings in 2021 and won after filing a motion for reconsideration regarding the court’s value of Mijac, Jackson’s music catalog owned by Sony Music.
As the motion remains pending, the estate’s value for tax purposes has yet to be determined. As a result, the California Franchise Tax Board requested that a portion of the estate “remain subject to administration,” which impacts the Michael Jackson family trust.
The new filing comes two months after Jackson’s son Bigi objected to Katherine using funds from the estate to pay her legal fees in a separate ongoing dispute regarding the executors handling the singer’s catalog sale to Sony. Katherine argues that the executors are thrifty when allocating the estate money to its beneficiaries and says they can afford to cover the costs she’s requesting.
The filing says, “… it seems clear to [Katherine] that the Executors are holding all of the assets in the Estate in order to keep control over them, and to avoid the more liberal distribution requirements of the Trust.”
Only Jackson’s children are beneficiaries of the estate, while Katherine is the sole beneficiary of a sub-trust in the late singer’s will.
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