Negotiations are still going on between the IRS and the Whitney Houston Estate. The government agency wants an $11 million payment, but the late singer’s estate is pushing back.
If Whitney Houston was a legend before her death in 2012, today her music continues to sell and generates big profits for her estate. When recording sales are measured in the millions, the IRS wants to be sure not to miss out on what it deems to be its share, before and after death.
WealthAdvisor’s recent article, “IRS Squeezing Whitney Houston’s Estate for $11 Million In Back Taxes,” says the number is $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.
Depending on the source, some say the negotiations are getting close to a resolution, while others question how it will even be possible for the estate to succeed in lowering the payments.
Either way, December 7 is the date the next status filing is due, as stipulated by the U.S. Tax Court.
Reference: WealthAdvisor (September 18, 2017) “IRS Squeezing Whitney Houston’s Estate for $11 Million In Back Taxes”