For nearly five years, Prince’s estate has been one of the most complex and extensive legal thickets in the music industry, as the star’s heirs have lined up in two factions and business conflicts have developed over the historic “vault” of unprecedented music. Prince.
Now, the property also has a problem with the IRS
In lawsuits before the United States Tax Court, it is clear that the estate and the federal government differ greatly in the value of many of Prince’s assets, including real estate, musical rights and the value of Prince’s name and image. 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 manager.
The lawsuit includes a copy of the IRS “disability notice”, dated June 2020, which said the estate owes an additional $ 32.4 million in federal taxes as of 2016, as well as a “fine related to accuracy “of $ 6.4 million. Comerica requested a trial in St. Paul, Minnesota, over the dispute.
Prince died at age 57 in April 2016 from an accidental overdose of an opioid pain reliever. But while he was known to retain ownership of much of his work, including his rights to publish music – the copyrights related to his compositions – he left no will.
Much of the discrepancy in the ratings is related to Prince’s musical rights. The estate fixed the value of NPG Music Publishing, the collection of its compositional copyright, at $ 21.2 million; the IRS believes it is really worth $ 36.9 million. The estate also set Prince’s songwriting “share of the writing rights at $ 11 million, but the IRS believed it was worth $ 22 million.
And the IRS values Prince’s ownership of his label, NPG Records, at $ 46.5 million, not the $ 19.4 million claimed by the estate.
The documents also show that the property and the IRS differ in value from various real estate properties that belonged to Prince, including about 149 acres on undeveloped land in Chanhassen, Minnesota, the Minneapolis suburb where Prince maintained his studio and creative headquarters, called Paisley Park. According to the court case, an independent appraiser set the land value at $ 11 million, but the IRS said its fair market value was $ 15 million.
Representatives of Comerica, who acted as “personal representative” of the estate, a role similar to that of an executor, declined to comment on Monday.
The tax dispute is the most recent complication in the estate, which has experienced a series of problems that have resulted in millions of dollars in attorney fees, but in late payments to the six adult relatives who are heirs to the Prince. (One of them, Prince’s half brother Alfred Jackson, died in 2019.)
For example, a $ 31 million deal with Universal Music for the rights to Prince’s “vault” – his treasure trove of unreleased recordings – was rescinded by a judge after Universal complained that an estate representative had misled them about exactly which rights were offered. (The deal later went to Sony, which has since released several albums.)
Alex Weingarten, a partner at the LA law firm Venable in Los Angeles, who deals with entertainment litigation and inventory issues and is not involved in the dispute with Prince, said Prince’s case was unusual because he had made no plans to your property. But the dispute with the IRS, he said, was not unexpected.
“Whenever you are dealing with properties of any significant size,” said Weingarten, “it is not uncommon to have valuation disputes with the IRS”