Michael Jackson's estate and the IRS have been locked in an ongoing legal dispute since 2021.
The legal disputes continue for Michael Jackson's family. Amid Katherine Jackson's battle with her grandson, Blanket "Bigi" Jackson, over her late son's estate, a recent filing from the executors under the King of Pop's will decreed that his beneficiaries will not receive distributions while a legal dispute with the IRS continues.
Michael's three children -- Prince Jackson, 27, Paris Jackson, 25, and Bigi, 22 -- are beneficiaries of his trust while his mom is the sole beneficiary of a sub trust in his will.
According to a May 28 filing obtained by ET, John Branca and John McClain, the executors under Michael's will, have rejected attorneys' request that a portion of the estate "remain subject to administration" while the remaining legal issues are resolved to distribute to the family trust.
Per the filing, the executors say they cannot "possibly determine what amount could be safely distributed at this time."
Michael's estate has been locked in a legal battle with the IRS since the latter audited the estate's federal estate tax return and "issued a note of deficiency," claiming that the estate "undervalued its assets" and owed "an additional $700 million in taxes and penalties."
In 2021, the estate disputed those assessments and, while it won after a trial in tax court, the estate then filed a motion for reconsideration regarding the court's value of Mijac -- Michael's music catalog owned by Sony Music -- that remains pending.
Consequently, the estate's value for tax purposes hasn't been determined, which has to happen before the IRS and the estate can agree to the value of deduction before anything can be finalized.
Per the filing, the trust "requires that 20 percent of the estate 'as valued for federal estate tax purposes' be distributed to charity before the remaining assets of the estate can be distributed to sub-trusts." Resolving the dispute is "necessary" to determine the charitable contribution.
The executors suggest that until all disputes are resolved and the estate tax return litigation is concluded, the estate continues to provide for Katherine and the kids through "the family allowance."
As ET previously reported, Katherine wants the estate to cover the legal fees she racked up in appealing a judge's prior ruling that allowed the estate to move forward with an undisclosed business transaction.
According to court documents obtained by ET, Katherine accused the executors of her late son's estate of trying to keep a tight grip over the money the estate distributes to the trust and, in turn, its beneficiaries. The court documents leave no room for ambiguity when they claim that "it seems clear to [Katherine] that the Executors are holding all of the assets in the Estate in order to keep control over them, and to avoid the more liberal distribution of requirements of the Trust."
The documents also state that "there can be little question that the Court has jurisdiction to instruct the Executors to pay [Katherine's] fees from the Estate."
Bigi had initially been on board with his grandmother, but ultimately sided with the estate to move forward with the business transaction. Katherine, however, decided to appeal the decision, and she now wants the estate to cover the legal expenses for said appeal.
For his part, Bigi wants the court to deny her request because, according to court documents, he "did not appeal the Court's ruling," while adding that "it was apparent that the Court was acting within its discretionary powers... the chances of a reversal on appeal were quite slim and Bigi did not wish to incur further expense in pursuing an appeal."
For more on the legal battle, check out the video below.
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