In April 2016, when legendary singer Prince passed away in his Minnesota home, he was 57 and had left no will. That itself started one of the most complicated probate court proceedings in the state’s history.
Now, five years later, another battle is ensuing. The Internal Revenue Service (IRS) has accused the “Purple Rain” singer’s estate, Comerica Bank & Trust, of undervaluing his estate by 50 percent. The IRS believes his assets are worth $163.2 million, although the estate’s overseers have placed its value at $82.3 million.
According to the Star Tribune, the IRS says the estate owes $32.4 million in federal taxes.
“This is a large discrepancy, both in terms of the dollars involved and the fact that the IRS thinks the estate is worth twice as much,” said Michael Smith, an estate planning attorney at Larkin Hoffman in Minneapolis.
However, Comerica maintains that its assets estimates are legit.
“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.
Comerica is now seeking a tax court to hold a trial in St. Paul, reports noted. Such proceedings can drag out the dispute for years and produce more legal fees for the estate, “at the expense of Prince’s heirs” (his six siblings).
“It could be several years before they get this worked out if they don’t agree to a settlement,” Patrick said. “It depends on how hard the IRS is digging in its heels.”
