Michael Jackson's Children Blocked from Late Singer's Trust Over '$700m Tax Bill'

In a surprising and complex turn of events, Michael Jackson's three children and his mother have been blocked from accessing funds from the late singer’s trust until a significant tax bill is resolved. 

The legendary "Beat It" singer, who passed away in 2009 at the age of 50, had designated his children—Prince, 27, Paris, 26, and Bigi, 22 (formerly known as Blanket)—as beneficiaries of his trust. 

His mother, Katherine Jackson, 94, was named the sole beneficiary of a sub-trust in his will.

However, recent legal documents obtained by People and filed on May 28 reveal that none of Jackson’s surviving family members will receive any funds from the trust until an ongoing dispute between his estate and the Internal Revenue Service (IRS) is settled. 

This dispute originated following an IRS audit of the estate's federal tax return, which led to the issuance of a notice of deficiency. 

The IRS alleged that the estate had "undervalued its assets" and claimed that it owed approximately $700 million in taxes and penalties.

The estate contested these findings and secured a victory in tax court in 2021. 

Despite this, they have since filed a motion for reconsideration concerning the court’s valuation of Jackson’s music catalog, Mijac, which is owned by Sony Music. 

This motion is still pending, further complicating the resolution of the tax dispute.

Legal representatives for Jackson’s children and his mother had previously requested that some funds be released to the family trust while the tax dispute continues. 

Unfortunately, this request was denied, with the suggestion that the "family allowance" could provide for them in the interim. 

As a result, the value of the estate remains unfinalized for tax purposes, and an agreement on the value of the deduction between the estate and the IRS has yet to be reached.

This financial and legal turmoil comes amidst another layer of complexity involving Bigi Jackson’s own legal battle with his grandmother. 

In March, Bigi filed to prevent Katherine Jackson from using funds from the estate to finance an appeal on a previous ruling in their ongoing legal conflict. 

According to documents obtained by TMZ, Bigi aimed to block Mrs. Jackson from utilizing the estate’s money for the appeal.

Previously, Bigi and Mrs. Jackson appeared to be aligned in their efforts to prevent the executors of Jackson’s estate from making a costly transaction, believed to be the sale of Jackson’s music catalog to Sony for $600 million. 

This unity has now seemingly fractured, adding another dimension to the already intricate legal and financial issues surrounding Michael Jackson’s legacy.

As the dispute with the IRS and the internal family conflict continue, the beneficiaries of Michael Jackson's trust remain in limbo. 

The resolution of these issues will not only determine the financial future of Jackson's heirs but also potentially influence the management and ownership of his extensive music catalog. 

For now, the late pop star’s family must navigate these turbulent waters, seeking a resolution that honors Jackson’s legacy and provides for his loved ones.a