MJ's Estate Accuses Gov't IP Expert Of Perjury In Tax Trial
By Jimmy Hoover
Law360, Washington (April 14, 2017, 3:11 PM EDT) -- The estate of Michael Jackson has accused the IRS's intellectual property expert of lying under oath during a high-profile tax trial in Los Angeles with hundreds of millions of dollars at stake, urging the U.S. Tax Court to turn down the agency’s bid to scrub parts of his testimony from the public record.
In an opposition filed April 5, the estate unloaded on the IRS’s motion to strike portions of testimony from Weston Anson, chairman of Consor Intellectual Asset Management, during the trial. The IRS had asked the court to seal parts of Anson’s testimony that dealt with a separate case involving the estate of Whitney Houston, but Jackson’s estate called the request a “red herring” designed to “strip from the record the evidence that Anson lied under oath and any suggestion that he lied.”
A trial transcript excerpted by the estate shows Anson testifying that he had “not begun any work” on the Whitney Houston case, despite later admitting that his firm was retained by the IRS in that matter as well and had prepared an expert report.
“If granted, the motion would leave Anson’s lies unchallenged when, in fact, his integrity was destroyed and he was revealed to be a perjurer with a clear bias toward the IRS,” the estate wrote. “Striking portions of Anson’s testimony where he was caught lying and admitted perjury would work to the substantial prejudice of the estate.”
Reached for comment Friday on the accusations, Anson told Law360: “My only comment is, is that the best they can do? Character assassination seems to me a mighty weak response to my full week of testimony, which seems to have destroyed their case pretty thoroughly. I’ve never seen character assassination filed as a legal document before. ... It seems silly and juvenile in the extreme.”
Jackson’s estate argued that the IRS’s rationale behind the motion — that the testimony violates Internal Revenue Code 6103’s prohibition against the disclosure of third-party return information — is flawed because the Houston estate case is a matter of public record and, further, counsel for Houston’s estate “will not seek either a sealing order or the striking of Anson’s testimony.”
“Given the public status of the Houston estate case, the IRS’s assertion of a 6103 violation is disingenuous — to be kind,” Jackson’s estate wrote. “None of the questions asked for or elicited testimony that was return information not already a matter of public record or that could otherwise be considered ‘return information’" under IRC 6103.
In a filing, Jackson’s estate asked the court late last month to strike all of Anson’s testimony in the case, following up on an oral motion that was made at trial.
Anson was called to the stand during the third and final week of the trial before visiting U.S. Tax Judge Mark Holmes to explain some of the details behind his report concluding that Jackson's publicity rights were worth $161 million at the time of his death. The value of those publicity rights, also known as name and likeness rights, has been hotly contested in the estate’s dispute with the IRS, with the estate's own expert, Jay Fishman, saying the rights were worth only $3 million at the time of Jackson’s death in 2009.
Under examination by IRS attorney Sebastian Voth, Anson discussed a wide range of potential licensing opportunities he had considered available to Jackson's estate when assembling his expert opinion, including video games, slot machines, a potential themed hotel or casino and posthumous appearances — similar to the use of a “hologram” of deceased rapper Tupac Shakur at the Coachella music festival in 2012.
Anson also addressed what had been a key topic for the various name and likeness experts opining in the case: the allegations, first in 1993 and then in 2003, that Jackson had molested young boys, and the ultimate impact those allegations would have had on the value of Jackson's name and likeness at the time of his death.
Relevant to the estate’s April 5 opposition, Anson was cross-examined by Howard L. Weitzman of Kinsella Weitzman Iser Kump & Aldisert LLP. During the cross-examination, Anson testified that he had not yet performed any work in connection with the Houston case.
“I thought you were working on it?” Weitzman asked, according to a transcript provided by the estate.
“We’ve not begun any work on the case,” Anson replied.
“Sir, haven’t you been asked to work on the Whitney Houston case?”
“Yes, we have been asked,” Anson said.
“So why wouldn’t you tell me that?”
“Because we haven’t been asked to do any actual work yet,” the expert responded.
Weitzman followed up on the questioning later in the transcript.
“So you’re testifying under oath that you or your firm — the firm which you know about — did not prepare any valuation in the Whitney Houston matter,” he asked.
“That’s correct,” Anson responded.
Anson later recanted, saying he gave that answer “on the direction of counsel,” who he said had informed him that revealing information about the case “could result in a felony.”
“Is it your testimony that you were told it was OK to commit perjury because otherwise you’d be charged with a felony?” Weitzman responded.
Jackson’s estate had petitioned the tax court in July 2013, challenging a lengthy notice of deficiency the IRS mailed to the estate that month. The notice contested the estate’s reported valuation of a litany of items, including a 2001 Bentley Arnage and rights to the master recordings of the Jackson 5.
According to the notice, the IRS had adjusted the value of the estate from $7 million to $1.32 billion. As a result, the agency demanded $702 million, including $505.1 million in deficiencies and $196.9 million in accuracy-related penalties.
The most notable discrepancy between the valuations of the parties as highlighted in the notice included the right to Jackson’s image and likeness. The IRS originally pegged that asset at $434.3 million, whereas the estate had claimed the right was worth only $2,105.
Counsel for the IRS does not comment on pending litigation.
Jackson's estate is represented by Avram Salkin, Charles Paul Rettig, Steven Richard Toscher, Robert S. Horwitz, Edward M. Robbins Jr., Sharyn M. Fisk and Lacey E. Strachan of Hochman Salkin Rettig Toscher & Perez PC; Paul Gordon Hoffman, Jeryll S. Cohen and Loretta Siciliano of Hoffman Sabban & Watenmaker APC; and Howard L. Weitzman of Kinsella Weitzman Iser Kump & Aldisert LLP.
The IRS is represented in-house by Donna F. Herbert, Malone Camp, Sebastian Voth, Jordan Musen and Denise Larson.
The case is Estate of Michael J. Jackson et al. v. Commissioner of Internal Revenue, case number 17152-13, in the U.S. Tax Court.
--Additional reporting by Daniel Siegal. Editing by Sara Ziegler.
Update: This article has been updated to include comments from Weston Anson.
https://www.law360.com/tax/articles/...y-in-tax-trial
