1:48pm PT by Eriq Gardner
Whitney Houston Estate Challenges $11 Million Tax Bill
The heirs of late pop star Whitney Houston are now in Tax Court over what the Internal Revenue Service claims is owed in estate taxes.
In a May 23 petition, now sealed and first reported by Bloomberg, the Whitney Houston estate objected to the determination that $22.6 million has been underreported, which the IRS claims means that more than $11 million is owed, including $3 million in penalties.
Some of the money is attributable to song and performance royalties, including a $9 million dispute over the worth of catalog albums, but it's another discrepancy that is particularly eye-opening.
The Whitney Houston estate said the IRS is in error by increasing the value of the singer's publicity rights from $11.5 million to $11.7 million. How the IRS came to its valuation is unclear, but this provides further evidence that the federal tax agency intends to pursue money from the name and image of dead stars.
With a trial scheduled for next February, the IRS is currently in court with the Michael Jackson estate over the value of the King of Pop's publicity rights. There, the IRS once asserted the value of these rights upon death was $434 million — it's recently backed off from this precise amount — while the Michael Jackson estate argued for just $2,105. Here's more background on the stakes and arguments.