The Prince’s estate has been one of the music industry’s most protracted and complex legal thickets for almost five years, as the star’s heirs have aligned in two factions and business disputes have arisen over Prince’s deep “safe” floor of non- released music.
The estate also has a problem with the IRS
Clearly, the estate and the federal government differ greatly on the value of many of Prince’s assets, including real estate, music rights, and the value of Prince’s name and likeness. According to the Internal Revenue Service, the estate is worth $ 163.2 million – about double the $ 82.3 million claimed by Comerica Bank & Trust, the estate’s administrator.
The court collection contains a copy of the IRS ” shortfall notice ‘, dated June 2020, which states that from 2016 the estate owes an additional $ 32.4 million in federal taxes, as well as a $ 6.4 million’ accuracy-related fine ‘. Comerica has a trial in St. Paul, Minnesota, asked about the dispute.
Prince died at the age of 57 in April 2016 from an accidental overdose of an opioid painkiller. But although he was known for retaining ownership of much of his work, including his rights to music publishing – the copyright associated with his songwriting – he left no will.
Many of the differences in valuations are related to Prince’s music rights. The estate estimated the value of NPG Music Publishing, the collection of its songwriting copyright, at $ 21.2 million; the IRS believes it’s actually worth $ 36.9 million. The estate also set the “writer’s share” of Prince’s songwriting rights at $ 11 million, but the IRS estimates it was worth $ 22 million.
And the IRS values Prince’s ownership of his record label, NPG Records, at $ 46.5 million, not the $ 19.4 million the estate is claiming.
The newspapers also show that the estate and the IRS differ on the value of various properties owned by Prince, including approximately 149 acres of undeveloped land in Chanhassen, Minn., The suburb of Minneapolis, where Prince maintains his studio and creative headquarters. Called Paisley Park. According to the court case, an independent valuer set the value of the land at $ 11 million, but the IRS said its fair market value was really $ 15 million.
Representatives of Comerica, who acted as the personal representative of the estate, a role similar to that of an executor, declined to comment Monday.
The tax dispute is the latest complication in the estate, which has had a series of problems that have led to millions of dollars in lawyers, but a delay in payment to the six adult family members who are Prince’s heirs. (One of them, Alfred Jackson, a half-brother to Prince, died in 2019.)
For example, a $ 31 million deal with Universal Music for rights to Prince’s “safe” – his crowd of unreleased recordings – was revoked by a judge after Universal complained that a representative of the estate had misled them about exactly what rights are offered. (The deal later went to Sony, which has since released a number of albums.)
Alex Weingarten, a partner at the Venable law firm in Los Angeles, who regularly deals with entertainment and trial issues and is not involved in the Prince dispute, said Prince’s case was unusual because he made no plan for his estate. do not have. But the dispute with the IRS was not unexpected, he said.
“Because you are dealing with estates of any significant size,” he said. Weingarten said, “it is not uncommon to have valuation disputes with the IRS”