MEMPHIS, Tenn. -- The Internal Revenue Service claims the Elvis Presley estate owes more than $14 million in back taxes because of alleged mistakes in reporting the late entertainer's income, the Memphis Commercial-Appeal said Friday.
The newspaper said the IRS contends the tax returns from Presley's estate failed to list all the money made by the performer's enterprises before and after his 1977 death.
Executors of Presley's estate have challenged all the IRS claims in U.S. Tax Court in Washington, calling them 'improper and erroneous.'
The IRS made 20 adjustments to the estate tax returns last month, questioning several figures, including the value placed on his white-columned mansion, Graceland and the share of profits Presley received under contract with his manager Col. Tom Parker.
The case is still pending.
In Probate Court in Memphis Friday, Judge Joseph Evans ordered the estate to file suit against Parker to recover money he got from agreements giving the 70-year-old manager more than $3 million without Presley receiving a share of the income.
The judge also ordered all payments to Parker to stop and said any future agreements with the manager should not be made pending outcome of litigation.
The IRS study of Presley's estate says taxable income should be raised from $4,134,390 to $25,154,628.81. Before arriving at that amount, the IRS looked at real property, stocks and bonds, administrative expenses and Presley's debts.
One section of the IRS challenge questioned Parker's role as Presley's advisor.
The IRS found that Parker had received about $3.2 million from various sources under his relationship with Presley during the last four years before Presley's death Aug. 16, 1977.
According to Tax Court records, the IRS concluded Presley failed to receive an equal share of those particular receipts as his contract with Parker dictated. Because of that finding, the IRS tacked on another $1.6 million to the estate's taxable income.
The IRS claims Parker had a 'dominant and fiduciary' relationship with Presley as far back as the late 1950s. In the opinion of the IRS, there was no evidence the singer ever had the benefit of independent counsel.
The co-executors of the Presley estate are the National Bank of Commerce in Memphis, Joseph A. Hanks, Presley's Memphis accountant, and Priscilla Presley of Beverly Hills, Calif., the entertainer's former wife.
