As tens of millions of American citizens file last-second returns on "Tax Day," the Internal Revenue Service is dealing with an explosive development that has the potential of rocking the billion dollar case focused on pop superstar Michael Jackson.
In February, the Michael Jackson Estate and the IRS concluded a groundbreaking trial. The proceeding featured testimony from those close to Jackson as well as experts over whether money is owed in estate taxes from the singer's death in 2009. Although part of the dispute deals with the value of Jackson's interest in the Sony-ATV and MIJAC music catalogs, the issue that has captured attention through the entertainment industry pertains to the value of Jackson's name and image upon death. If the IRS is successful in convincing U.S. Tax Court Judge Mark Holmes that administrators of Jackson's estate undervalued his publicity rights by hundreds of millions of dollars, it will reshape how stars plan for their death.
With this in context, the Michael Jackson Estate is now looking to exclude the complete testimony of the IRS' primary valuation expert, Weston Anson, asserting that perjury has tainted "his credibility, reliability, neutrality and objectivity."
Specifically, the IRS' reliance on Anson to establish the worth of Jackson's name and image at time of death at $161 million — instead of just $2,105, as the other side contends — is now in danger, thanks to the expert's testimony about Whitney Houston.
During the trial, Anson was cross-examined by attorney Howard Weitzman and asked whether he had ever worked for the IRS before.
Anson responded, "I've never worked for the Internal Revenue Service before."
Weitzman would soon ask Anson about working for the IRS on the Whitney Houston case — the one where the tax agency claims Houston's Estate undervalued her own publicity rights by $11.5 million.
"We've not yet begun any work on the case," Anson testified.
Later, Weitzman would ask Anson if he had written an IP valuation of Whitney Houston.
Anson: "Absolutely not."
The Michael Jackson Estate is now seizing upon these words because Anson and CONSOR Intellectual Asset Management had in fact prepared and submitted a report dated June 8, 2015, titled, "Analysis of the Fair Market Value of the Intangible Property Rights Held by the Estate of Whitney E. Houston as of February 11, 2012 for Estate Tax Purposes."
In addition, court papers say that CONSOR had a 2009 contract for $169,168 for services as an expert on the valuation of intangibles and that Anson's firm has been awarded $2.64 million in funds since 2014. Despite this, Anson also testified that he had "no idea" whether there would be impact on him if the IRS prevailed in the Michael Jackson tax case.
"The context in which the lies began reveals Mr. Anson's true intent in lying under oath was to disguise his bias in favor of the IRS and to hide the fact he had been awarded multiple contracts from the IRS for substantial sums of money," writes the Michael Jackson's Estate in a motion to strike his testimony.
The IRS, in turn, is seeking to limit the damage by arguing that Weitzman improperly asked questions pertaining to a taxpayer other than Michael Jackson and that Anson's answers contained "confidential" information. The tax agency would prefer to strike the disputed sections of the trial transcript for that reason.
Besides responding that such an objection is untimely, and that the Houston case is a matter of public record, the Michael Jackson Estate writes to the judge that it "would be prejudiced if the [IRS] motion were granted and the Court would be unduly limited in its fact finding by not being able to consider that Anson repeatedly lied in open court in response to questions that went to the issue of bias."
Judge Holmes will soon rule on this issue. His ultimate determination of tax liability won't likely come for months.