Michael Jackson's children cannot receive money from his estate until a long-running tax dispute is resolved.
Prince, 27, Paris, 26, and Bigi Jackson, 22, as well as the late King of Pop’s mother, Katherine, 94, have been told by John Branca and John McCain, the executors of the 'Billie Jean' hitmaker's will, that they won't receive anything from his trust until the ongoing row is finalised.
The dispute began when the IRS audited the estate's federal tax return and "issued a note of deficiency" claiming that the estate "undervalued its assets" and owed "an additional $700 million in taxes and penalties", documents filed this week and obtained by People magazine state.
In 2021, the estate disputed the assessments and won following a trial in tax court, but since then, its lawyers filed a motion for reconsideration regarding the value of Mijac, Michael's catalogue owned by Sony Music, which remains pending. As a result, the value of the estate has not been determined for tax purposes and the two parties need to agree a value of deduction before a judgement can be entered.
And while the process is ongoing, attorneys requested a portion of the estate "remain subject to administration" to distribute to the Michael Jackson family trust.
However, the executors rejected the request because they cannot "possibly determine what amount could be safely distributed at this time."
In addition, the trust "requires that 20 percent of the estate 'as valued for federal estate tax purposes' be distributed to charity before the remaining assets of the estate can be distributed to sub-trusts." This means a resolution of the dispute is "necessary" to determine the size of the charitable contribution.
The executors suggested that until the issue is resolved, the estate should provide for Michael's kids and his mother through "the family allowance".
Until then, the executors suggest that the estate provide for the kids and his mother through "the family allowance."
