“Lawyers for the Whitney Houston Estate are still attempting settle an $11 million IRS demand. But did Uncle Sam completely miscalculate the royalties?”
Pop singer Whitney Houston was a legend in the music business. She sold millions of records before her death in 2012. In fact, she’s still selling records after her death. The IRS now wants its share.
WealthAdvisor’s recent article, “IRS Squeezing Whitney Houston’s Estate for $11 Million In Back Taxes,” $11 million (and counting…). However, both the estate and the IRS are fighting over the heavy tax bill. At this point, they’re in discussions—with few details on any settlement.
Much of the paperwork in this case has been designated as confidential, but it looks like the IRS first issued its demand in May 2016. Since then, the talks have centered on how the IRS is calculating Houston’s unpaid royalty amount.
The IRS has calculated more than $22 million in untaxed royalties. On the other hand, Houston estate attorneys say the number is closer to $2 million. This wide gap in numbers is similar to what attorneys are going through in the estate of Michael Jackson.
Some of the heft in the IRS’s calculation is based on Whitney’s “image and likeness.” This is a relatively intangible asset that can generate a massive amount of revenue after a star has passed away. There’s no justification for exactly how the IRS arrived at an $11.7 million “image and likeness” figure. It’s really anyone’s guess.
The IRS says that, of the $22 million-plus demand, the Whitney Houston Estate has been hit with $11 million in taxes, which will apparently include some substantial late fees when everything is said and done and all the issues are resolved.
Some question how Houston’s attorneys can lower the payments. Other insiders believe that the matter is close to resolution, with both sides “nearing a deal.”
The US Tax Court has stipulated that the next status filing is due December 7.
Reference: WealthAdvisor (September 18, 2017) “IRS Squeezing Whitney Houston’s Estate for $11 Million In Back Taxes”