The IRS says executors for the Prince estate undervalued the assets by as much as 50% — or more than $80 million. Prince himself also owed $32.4 million in federal taxes at the time of his overdose.
According to the Internal Revenue Service, the Prince estate is worth around $163.2 million. That’s far less than the $82.3 million valuation calculated by Comerica Bank & Trust, the estate administrator. Most of the discrepancy revolves around Prince’s music publishing and recording interests, court documents reveal.
Those same documents show that the IRS believes the Prince estate owes $32.4 million in federal taxes. That’s more than double the original tax bill based on Comerica’s initial valuation. The Prince estate also owes another $6.4 million penalty for the “substantial” undervaluation of assets. It’s looking like the complicated probate case around Prince’s estate has no end in sight.
Prince died on April 21st, 2016 from a fentanyl overdose. Estimates of his net worth then varied widely, swinging anywhere from $100 million to $300 million. But as the probate case drags on, Prince’s family is becoming increasingly upset with the lawyers and consultant fees.
Comerica and its lawyers in Minneapolis say their estimates of the Prince estate are not inaccurate.
Comerica sued the IRS this summer in U.S. Tax Court in Washington D.C. It says the agency’s calculations of the worth of the Prince estate are filled with errors. An estate planning attorney in Minneapolis not involved with the case, Dennis Patrick, says the process has no set formula.
“What we have here is a classic battle of the experts – the estate’s experts and the IRS’ experts,” Patrick told ABC News. Valuing an estate as large and encompassing as the Prince estate is “way more of an art than a science,” according to him. That’s because recording contracts, publishing deals, and other recording interests don’t have a set monetary value.
The Prince estate’s lengthy probate battle will continue as Comerica seeks a trial in St. Paul.
A trial will generate more legal fees for Prince’s heirs, which could further dwindle the estate’s final value. For now, it’s unclear how this issue will wrap up. Prince’s status as a legendary pop icon is only surpassed by Michael Jackson.
His music publishing and recording interests could result in millions for his heirs once everything is settled in court. Prince had no known children and died without a will. The estate is split between his sister Tyka and his half-siblings Jackson, Sharon Nelson, Norrine Nelson, John Nelson, and Omar Baker.