Believing that the ‘Purple Rain’ hitmaker left behind an estate worth more than $160 million, tax authorities are now demanding a payment of $32.4 million in addition to a $6.4 million penalty.
Bosses overseeing Prince‘s affairs have been accused of undervaluing the music icon’s estate by at least half of its actual worth.
U.S. tax authorities at the Internal Revenue Service believe the “Purple Rain” legend left behind an estate worth more than $160 million (£117 million) – but his money managers have filed paperwork valuing his assets at just over $80 million (£58.5 million).
The discrepancy between the two figures primarily involves the singer’s music publishing and recording interests. Specifically, a $15 million difference of opinion in the fair market value of Prince’s ownership of NPG Music Publishing, as well as an $11 million valuation gap in his interest in his music compositions.
Now IRS officials are taking the issue to court, demanding a payment of $32.4 million (£23.7 million), in addition to a $6.4 million (£4.7 million) penalty for what they insist are inaccurate figures.
Estate administrators have denied the allegations, and are standing by their valuation, reports TMZ.
Dennis Patrick, an estate planning attorney not involved with the proceedings, described valuing large estates as “way more of an art than a science.” He explained to the Star Tribune, “What we have here is a classic battle of the experts – the estate’s experts and the IRS’ experts.”
Dennis added, “It could be several years before they get this worked out if they don’t agree to a settlement. It depends on how hard the IRS is digging in its heels.”
Prince died from an accidental drug overdose in 2016, without a will in place, leading to a number of legal challenges mounted by his siblings, who were named his equal heirs.