The IRS charges the ‘King of Pop,’ Michael Jackson’s estate $702 million in back taxes. The amount includes federal taxes and penalties and interest. The IRS accuses that the estate undervalued some of Jackson’s assets by hundreds of millions of dollars. The Jackson estate went to court challenging the IRS’ claims saying that the agency over-estimated the value of Jackson’s estate.

The publication Dawn, shares the particulars of the worth of Michael Jackson’s estate and IRS’ estimate of the worth of the estate.

“Jackson died on June 25, 2009, the date of the estate tax return. His estate’s beneficiaries are Jackson’s mother, Katherine, his three children and charities.

The estate’s 2009 tax filing said the total Jackson estate had a $7 million taxable value. In May, the IRS issued the estate a tax deficiency notice for $505.1 million in taxes and $196.9 million in penalties, according to Tax Court documents dated Tuesday.

Jackson’s image and likeness were valued by the IRS at $434 million. The estate said its taxable value was $2,105.

The largest taxable item was the estate’s stake in some of Jackson’s recording assets, listed as MJ/ATV Publishing Trust interest in New Horizon Trust II, which was valued at $469 million by the IRS. It was not valued in the 2009 estate filing.”

The IRS accuses that the real value of the estate was undervalued. The IRS stuck with the tax bill it had come up with, but the Jackson estate is ready to fight a legal battle because it believes that the IRS has not assessed the tax liability correctly.

According to a report in Dawn: “A Jackson estate spokesman said, the IRS’ appraisal values ‘were based on speculative and erroneous assumptions unsupported by the facts or law.’ The Jackson estate has paid $100 million in taxes,” he said on Friday.

Under the U.S. Tax Court’s rules, the Jackson estate will not need to pay any taxes or penalties unless the court rules in favor of the IRS.”

If the IRS has made no mistake, it will be able to defend itself, which can land the Jackson estate in trouble. It must be noted that the IRS would not be negligent when assessing the worth of the Jackson estate.