Valensi Rose Partner Michael R. Morris was interviewed by journalists for Bloomberg Tax and for articles about the Tax Court’s ruling that Michael Jackson’s estate was worth only a small fraction of the value the Internal Revenue Service had imputed – especially the value of the late singer’s image and likeness.

The Bloomberg article quotes Michael as saying that “the notoriety of Michael Jackson’s alleged misdeeds, although not proven, totally undercut the value of his name and likeness while he was alive.”

In the Law360 article, Michael points out the rules vary from one state to another about posthumous property rights to a celebrity’s name and likeness. Few high-profile individuals make a decision about where to live based on a state’s treatment of these rights.

"It's a hard enough sell when you're talking about current taxes, which affect the pocketbook immediately," he said. "You add on the fact that it's estate taxes and estate right, I think for the most part people will not make their life less pleasant to capture those types of benefits."

But for celebrities who do consider how a state will treat these rights, he added, proper planning is needed. "What you need to be concerned about is how will your name-likeness rights be managed after you die and what is the potential for it to create a taxable asset in the estate when you die," he said.

Jackson died on June 25, 2009. The IRS estimated the value of his image and likeness at $161 million, his ownership interest in a music publishing company at $206 million, and his catalog of songs at $114 million, for a total of $481 million. The Tax Court valued these at $4 million, zero, and $107 million, respectively, or $111 million in all – $370 million less than the IRS estimate.

Bloomberg reporters Aysha Bagchi and Jeffrey Leon noted that the Jackson estate focused on the income and revenue available at the time of the singer’s death, while the IRS looked at potential future revenues.

“Even if these potential revenue streams were traceable to Jackson’s image and likeness, they were not foreseeable when Jackson died,” the Tax Court ruled.

The articles appeared in Bloomberg Tax and Both were published on May 5, 2021.

A former trial lawyer for the IRS and a Certified Specialist in Taxation Law, Michael helps clients – many of whom are in the entertainment industry – with tax, estate and business transaction issues, business solutions, and copyright and contractual matters.