Readers in Miami may or may not be aware that when a person passes away, there is an estate tax imposed by the Internal Revenue Service (IRS) on any assets that he or she may have left behind. Before the estate administrator disperses any assets to the beneficiaries, they are required by law to obtain an accurate asset and property valuation and pay off any debts the deceased person may have owed, as well as pay the federal estate tax.
The IRS has reportedly issued a deficiency notice to the estate of Michael Jackson. According to reports, the notice is based on what the IRS claims is a significant difference between the taxes that were paid on the estate and the taxes that are actually owed due to a serious undervaluation of the estate’s gross worth. The notice is asking for $700 million, which includes the owed taxes, as well as interest and a penalty for the deficiency.
Those handling Jackson’s estate have reportedly contested the notice, so the case will go before a federal tax court. A judge will determine whether there was an error in the reporting of the gross estate worth and thus, an underpayment of the owed estate taxes.
Executing an estate can be a complex process. That is where an experienced attorney can help. A lawyer can help ensure you understand all of the legal obligations that are required of an estate administrator. Legal counsel is also available to answer any questions and address any concerns that you may have throughout the process.
Source: Forbes Magazine, “IRS To Michael Jackson’s Estate: Who’s Bad?”, Kelly Phillips Erb, August 26, 2013