FILE - In this Nov. 22, 2015, file photo, Prince presents the award for favorite album - Soul/R&B at the American Music Awards in Los Angeles. The memoir Prince was working on at the time of his death, “The Beautiful Ones,” is due out in late October 2019. (Photo by THE ASSOCIATED PRESS)

FILE - In this Nov. 22, 2015, file photo, Prince presents the award for favorite album - Soul/R&B at the American Music Awards in Los Angeles. The memoir Prince was working on at the time of his death, “The Beautiful Ones,” is due out in late October 2019. (Photo by THE ASSOCIATED PRESS)

IRS says executors undervalued Prince’s estate by 50 per cent

IRS determined Prince’s estate worth $163.2 million

MINNEAPOLIS — The ongoing controversy over the money left behind by Prince when he died without a will is heating up again after Internal Revenue Service calculations showed that executors of the rock star’s estate undervalued it by 50 per cent, or about $80 million.

The IRS determined that Prince’s estate is worth $163.2 million, overshadowing the $82.3 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 $32.4 million in federal taxes, roughly doubling the tax bill based on Comerica’s valuation, the Star Tribune reported.

The IRS also has ordered a $6.4 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 $100 million to $300 million.

With Prince’s probate 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 at Fredrikson & Byron in Minneapolis maintain their estate valuations are solid. Comerica sued the IRS this summer in U.S. Tax Court in Washington, D.C., 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 attorney at DeWitt LLP 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 in St. Paul. 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.

The Associated Press

Music

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Dwayne Buckle, 40 of Red Deer finished a 1,638-kilometre walk, in honour of his family. The 12-week, 82 day-journey wrapped up in Port Hardy, B.C. on Monday. Facebook photo
Red Deer man completes 1,638 km hike for cancer research

Dwayne Buckle, a Red Deer firefighter returned home Friday after his 12-week journey

The Pfizer-BioNTech vaccine deliveres to Canada are being delayed because of complications at their European distribution facility. THE CANADIAN PRESS/Nathan Denette
Delays of Pfizer vaccine delivery to impact Alberta’s vaccination plans

Alberta has administered 74,000 doses of the COVID-19 vaccine so far

Two inmates at Bowden Institution have tested positive for COVID-19. (Black Press File Photo)
2 Bowden inmates test positive for COVID-19

A pair of inmates at Bowden Institution have tested positive for COVID-19.… Continue reading

Salons and barbershops are able to open on Monday, the Government of Alberta announced this week. (Photo courtesy Pixabay)
Red Deer salon owner “relieved” business can re-open next week

The owner of a Red Deer salon says she’s “definitely relieved” her… Continue reading

Red Deer Valhalla Pure Outfitters owner Darren Schaedeli has seen a significant increase in those looking to tackle winter experiences. Some are trying their hand at "hot tent camping" as he did in the West Country several weeks ago.
Photo contributed
Central Albertans enjoying the great outdoors this winter

Stir crazy and beach-deprived central Albertans are embracing the great outdoors this… Continue reading

Lesser Slave Lake UCP MLA Pat Rehn. (Facebook)
Updated: Jason Kenney kicks Lesser Slave Lake MLA out of caucus

Pat Rehn will not be permitted to run for UCP nominations

Manchester United's Tobin Heath celebrates scoring against West Ham United during the FA Women's Super League match at Victoria Road Stadium, London, Sunday Oct. 18, 2020. (John Walton/PA via AP)
Double 1st: Man U men, women leading 2 leagues, play champs

Double 1st: Man U men, women leading 2 leagues, play champs

A group of Buffalo Bills fans from Toronto pose for a photo while tailgating in the parking lot of New Era Field before an NFL football game between the Bills and the New York Jets, Sunday, Dec. 9, 2018, in Orchard Park, N.Y. THE CANADIAN PRESS/AP-Adrian Kraus
Being unable to attend Bills playoff games due to pandemic pains Canadian fans

Being unable to attend Bills playoff games due to pandemic pains Canadian fans

FILE - Chicago Cubs' Kris Bryant runs the bases after hitting a solo home run in the sixth inning during a baseball game against the Cleveland Indians in Cleveland, in this Wednesday, Aug. 12, 2020, file photo. Bryant is among roughly 125 players who entered Friday, Jan. 15, 2021, eligible to exchange salary arbitration figures with their teams. (AP Photo/Tony Dejak, File)
Lindor, Bryant, Bellinger, Seager get big-money deals

Lindor, Bryant, Bellinger, Seager get big-money deals

Brooklyn Nets coach Steve Nash points during the third quarter of the team's NBA basketball game against the New York Knicks on Wednesday, Jan. 13, 2021, in New York. (Brad Penner/Pool Photo via AP)
More NBA games off, as league continues struggles with virus

More NBA games off, as league continues struggles with virus

Washington Capitals' Jakub Vrana (13) is congratulated for his goal during the second period of the team's NHL hockey game against the Buffalo Sabres, Friday, Jan. 15, 2021, in Buffalo, N.Y. (AP Photo/Jeffrey T. Barnes)
Vanecek makes 28 saves in NHL debut, Capitals sweep Sabres

Vanecek makes 28 saves in NHL debut, Capitals sweep Sabres

Chicago Blackhawks goaltender Collin Delia (60) makes a save after Tampa Bay Lightning left wing Ondrej Palat (18) fell down during the first period of an NHL hockey game Friday, Jan. 15, 2021, in Tampa, Fla. (AP Photo/Chris O'Meara)
Stamkos, Palat lift Lightning over Blackhawks again

Stamkos, Palat lift Lightning over Blackhawks again

Canadian women's soccer team member Rhian Wilkinson is seen during a training session in Vancouver, B.C. Wednesday, April 21, 2015. THE CANADIAN PRESS/Jonathan Hayward
Former Canadian international Rhian Wilkinson leaves Canada Soccer coaching job

Former Canadian international Rhian Wilkinson leaves Canada Soccer coaching job

Tkachuk, Senators down Maple Leafs 5-3 in 1st game in 10 months

Tkachuk, Senators down Maple Leafs 5-3 in 1st game in 10 months

Most Read