Jackson Family Faces $2 Billion Freeze-Out: IRS Problems Tie Up Cash for Michael's Kids and Mom
Half of Michael's music catalog is expected to be sold to Sony.
Late legend Michael Jackson's $2 billion estate is tied up in an ugly dispute with the IRS over taxes, which has reportedly left the King of Pop's three adult children — and ailing 94-year-old mom — scrambling for cash while they're iced out of their inheritance, RadarOnline.com has learned.
Jackson matriarch Katherine and Michael's kids — Prince, 27, Paris, 26 and 22-year-old Bigi, who is also known as Blanket — were said to be blindsided by a bombshell legal filing on May 28.
Executors claim they cannot 'safely' distribute funds from Michael's estate until the IRS determines the exact value of his music catalog.
In court documents, Jackson's executors John Branca and John McClain argue they cannot "possibly determine what amount could be safely distributed" to the four heirs from their tremendous trust fund until the feds decide on the exact value of Michael's roughly $1.2 billion-plus music catalog — half of which is being sold to Sony.
The filing states the IRS had previously declared the estate "undervalued its assets" and owed "an additional $700 million in taxes and penalties,"
A family member said the freeze has put Michae's mother Katherine and his kids in 'financial straits.'
But in 2021, that ruling was overturned and the executors filed a motion for the IRS to reexamine the worth of Michael's tunes, including hits such as Thriller and Beat It.
A family member squealed, "This situation has put the kids and Katherine in financial straits. There's a real possibility of them running out of cash before it's resolved because they don't exactly live frugal lives."
The family member noted Michael's adult children are 'used to opulence and luxurious living.'
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"The kids are used to opulence and luxurious living — and Katherine's medical bills are enormous for virtually around the clock care," the family member added.
A spokesperson for the estate insisted lucrative allowances are being provided to the group until the IRS squabble is settled — and the executors claimed "virtually no request of Mrs. Jackson for her care or maintenance has been declined," adding she's received more than $55 million since the singer's overdose death at age 50 in 2009.
The spokesperson also insisted state law, not executors, are tying up the cash.
Katherine previously argued executors were being too frugal with awarding money to her and her grandchildren.
The latest filing isn't the first fight over Michael's money. In court papers from April, Katherine argued the executors were being too frugal with awarding money to her and the kids.
And during the previous month, Bigi demanded the estate stop paying his grandmother's mounting legal bills for what he saw as a longshot quest to stop the proposed Sony sale, which was championed by Prince, Branca and McClain.
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Sources snitched the ongoing legal tussles are bad news for the already fragile health of Michael's beloved mother, who is rumored to have had a stroke in 2018.
But even worse, spies dish, it's unclear how much of the fortune will be left for the pop star's loved ones after taxes are tallied as his will also specifies 20 percent of his estate must first be distributed to charity.
"The whole family seems to spend money like it's water," the insider said. "Michael must be turning over in his grave!"