The ongoing controversy over the money left behind by Prince when he died without a will is heating up again after America’s Internal Revenue Service calculations showed that executors of the music icon’s estate undervalued it by 50 per cent.
The tax agency determined that Prince‘s estate is worth $US163.2 million ($A212.1 million), overshadowing the $US82.3 million valuation submitted by Comerica Bank & Trust, the estate’s administrator.
The discrepancy primarily involves Prince‘s music publishing and recording interests, according to court documents.
Documents show the IRS believes that Prince‘s estate owes another $US32.4 million in federal taxes, roughly doubling the tax bill based on Comerica’s valuation, the Star Tribune reported.
The IRS also has ordered a $US6.4 million “accuracy-related penalty” on Prince‘s estate, citing a “substantial” undervaluation of assets, documents show.
Prince‘s death of a fentanyl overdose on April 21, 2016, created one of the largest and most complicated probate court proceedings in Minnesota history.
Estimates of his net worth have varied widely, from $US100 million to $US300 million.
With Prince‘s case dragging on, his six sibling heirs have grown increasingly unhappy, particularly as the estate has doled out tens of millions of dollars to lawyers and consultants.
Comerica and its lawyers maintain their estate valuations are solid. Comerica earlier sued the IRS, saying the agency’s calculations are riddled with errors.
“What we have here is a classic battle of the experts – the estate’s experts and the IRS’ experts,” said Dennis Patrick, an estate planning lawyer at DeWitt in Minneapolis who is not involved in the case.
Valuing a large estate, Patrick added, “is way more of an art than a science.”
Comerica, a Dallas-based financial services giant, has asked the tax court to hold a trial.
A trial could dramatically lengthen the settlement of Prince‘s estate and generate more legal fees at the expense of Prince‘s heirs, Patrick said.