IRS haunts Michael Jackson beyond the grave

Michael Jackson’s finances were apparently in disarray when he died in 2009, at least according to a banker who testified on Tuesday during a tax trial. The IRS is accusing the late singer’s estate of failing to include valuable assets, including the singer’s own image, when he passed away.

New York Daily News reports that Jackson’s former banker, David Dunn, testified in the trial against Jackson’s estate, which could possibly lead to up to a $1 billion tax bill. The banker, who testified in the U.S. Tax Court in Los Angeles, claimed that the King of Pop knew about the financial crisis and was desperate to find ways to take care of it.

“He was on the edge. He was desperately trying to figure out what he could do to address his financial crisis.”

Dunn stated that he was hired in 2007 by the Jackson team to help the singer, allegedly on the verge of bankruptcy, pull his finances back together. Dunn claimed he worked hard to get Jackson out from under “tower debt,” but that Jackson would often undermine him at the last minute, and pull in risky side deals for up-front cash. He stated that by 2008, the “Heal the World” singer amassed around $300 million in debt.

The banker also touched on personal issues Jackson shared with him, specifically the singer’s sadness over losing the comfort of his beloved Neverland home in Los Olivos, California.

“We talked about his sadness in knowing he was never going to live in Neverland again. It was the culmination of the molestation allegations, the culmination of recognizing the financial situation he was in.”

Jackson once said he’d never live in the home again, due to police raids that took place during his molestation accusations. Jackson moved out the country for a bit of time, but he never let go of the ranch. In 2008, Colony Capital LLC, an investment company owned by billionaire Tom Barrack, paid off Jackson’s default loan on the home.

“He talked about his young career and being at his peak. He was struggling with how to make a living and still be with his children, who were of paramount importance,” Dunn continued.

In an bittersweet twist of fate, Jackson’s music sales skyrocketed after his death in 2009. With new revenue, his estate refinanced his debt. However, in 2013, additional debt was thrown at the Jackson estate when the IRS claimed that the estate “undervalued assets including the worth of Jackson’s likeness and image when he died.”

Should the IRS win the case, Jackson’s estate could be responsible for anywhere from $700 million to $1 billion.

[Feature Photo: AP/Doug Pizac, file]