The US tax agency has valued Prince‘s estate at 50 per cent higher than proposed by the administrator, causing more legal trouble for the estate’s settlement.
As reported by the Star Tribune, the Internal Revenue Service has valued Prince’s estate at £119.4million (US$163.2million), significantly higher than the £60.2million (US$82.3million) valuation from Comerica Bank & Trust, the estate’s administrator.
The discrepancy between the two figures primarily involves the singer’s music publishing and recording interests. Specifically, a $15million difference of opinion in the fair market value of Prince’s ownership of NPG Music Publishing, as well as an $11million valuation gap in his interest in his music compositions.
Because of this new valuation, the IRS has claimed the estate owes an additional $32.4million in taxes, approximately doubling the tax bill. The government agency has also issued a $6.4million “accuracy-related penalty” on Prince’s estate, according to court documents.
Speaking to the Star Tribune, Dennis Patrick, an estate planning attorney not involved with the proceedings, described valuing large estates as “way more of an art than a science”.
“What we have here is a classic battle of the experts – the estate’s experts and the IRS’ experts,” Patrick said.
“It could be several years before they get this worked out if they don’t agree to a settlement. It depends on how hard the IRS is digging in its heels.”
Prince died in 2016 from an overdose, leaving behind no will. In the years since his death, the exact valuation of the singer’s estate remains up for debate. While the singer’s heirs have yet to benefit from the estate, the Associated Press reports bankers, consultants and lawyers have earned millions from it.