According to the IRS, Prince’s estate has been undervalued by $80 million and now they are demanding that an additional $32 million be paid in taxes.
Nearly five years since his accidental overdose, Prince’s untimely death continues to leave a gaping hole in the music industry. According to recent reports, the Purple Rain legend also left behind a messy financial situation with the distribution of his estate.
Just this morning, NBC reported that the Internal Revenue Service (IRS) believe executors of Prince’s estate had undervalued its worth by 50%.
The alleged error is the latest in a lengthy saga following the rock star’s passing, as he did not leave behind a will managing his fortune.
The estate’s administrators, Comerica Bank & Trust, originally estimated the estate to be worth $82.3 million (approx. $107 million AUD). The IRS, on the other hand, valued the assets to be worth a whopping $163.2 million.
I truly believe that he had a will. He was too protective over his work.
— 💋💋Kacee💋💋 (@KayeQ80) January 3, 2021
The organisation is now seeking $32.4 million in federal taxes as well as an extra $6.4 million as an “accuracy-related penalty.” Comercia’s team have taken legal action, claiming that their estate valuation is solid and the agency’s value is “riddled with errors.”
According to Dennis Patrick, an estate planning attorney not involved in the case, “What we have here is a classic battle of the experts — the estate’s experts and the IRS’ experts.” He described the complexities of valuing a large estate as “more of an art than a science.”
If the valuation process really is more art than science, then this artwork would be an overwhelming abstract mess.
Wow. Bills don’t stop even when you are dead and gone.
— Wan (@jgray_12) January 3, 2021
According to StarTribune, Prince’s failure to leave a will after his accidental overdose has created “one of the largest and most complicated probate court proceedings in Minnesota history.”
This unfortunately means that Prince’s six siblings, the current heirs to his estate, have not received a cent of their inheritance while millions of dollars have been spent on legal fees.