Aretha Franklin’s estate on the hook for $6 million in unpaid Income tax to the IRS

The legendary "Queen of Soul" sold millions of records over several decades, but apparently all of her tax burdens were not settled before her passing

Aretha Franklin
Aretha Franklin performs onstage during the 'Clive Davis: The Soundtrack of Our Lives' Premiere Concert during the 2017 Tribeca Film Festival at Radio City Music Hall on April 19, 2017 in New York City. (Photo by Noam Galai/Getty Images for Tribeca Film Festival)

Aretha Franklin, who died earlier this year after a cancer battle has financial woes that lives on. The Queen of Soul reportedly owes the IRS a millions, The Detroit News reports.

The “Queen of Soul” amassed 75 million records sold worldwide and earned 18 Grammy Awards for her R&B musical contributions.

But according to documents filed in Oakland County, Mich., Probate Court, Franklin’s estate owes Uncle Sam some $6.3 million in unpaid income tax, based on the Internal Revenue Service’s “proof of claim” filings entered on Dec. 12 and 19, the newspaper says.

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Franklin’s oversized debt bill is a culmination from years 2012 to 2018. Records show she has an unpaid assessed balance of $1,305,403 from December 2012, which included $552,718 due Dec. 31, 2018, the IRS claims.

According to the filing: “no part of this debt has been paid and it is now due and payable to the United States Treasury at the Office of the Internal Revenue Service” and “this debt has priority and must be paid in full in advance of distribution to creditors to the extent provided by law.”

Franklin, who lived in Detroit and died in August at 76 of pancreatic cancer, left behind an $80 million fortune without making out a will. Her four sons Clarence Franklin, Edward Franklin, Kecalf Franklin and Ted White Jr., were bequeathed the estate equally in accordance with Michigan law. As heirs to her estate, the responsibility falls on them to pay the tax bill.

Gwendolyn Quinn, Franklin’s longtime publicist released the following statement about the tax debt, quoting the estate’s attorney, David Bennett.

“The IRS has filed its proof of claim in the ordinary course of the estate proceeding,” Bennett said. “This is not a liquidated claim, and it is disputed by the estate. The vast majority of Ms. Franklin’s personal 1040 tax obligations were paid prior to her death — something she wished to occur. The estate is diligently working to resolve any remaining issues.”

Bennett explained that Franklin had uncashed checks that she never deposited that caused the IRS to label it as undeclared income.

“She had a lot of (pay) checks lying around that she had never cashed,” Bennett said. “I had to have some of them reissued because they were so old. I don’t know why she didn’t cash them, but it seems that the IRS figured some of it as undeclared income and are going after it.”

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This is not Franklin’s first time at odds with the IRS.

In 2008, unpaid taxes almost cost her to lose her house, which next to the Detroit Golf Club. Franklin owed $19,192 in back taxes on the home and just a few months ago it was sold for $300,000.

In the early 90s, Franklin dealt with tax troubles involving her Bloomfield Hills, Mich., mansion, which had a tax lien placed on it for $225,618 because personal taxes from 1991 went unpaid.

Other legal actions included a 2015 claim by a Township condo association which said the singer owed $11,563 in fees and maintenance assessments.

Her attorney said there are other “baseless” claims against her estate like one from a Colorado woman for $1million that got nowhere fast and at the end of November it was disallowed by the estate.

“I think she heard of the death, and it was just a stab in the dark,” Bennett said previously in an interview. “There is no merit to it.”

Another claim comes from a Detroit man who is suing for $53,818 for alleged professional services for acquiring recording contracts in 2011-13, according to reports. But the estate says it doesn’t plan to consider that claim.

Franklin’s son Edward filed a motion requesting that the estate’s expenditures and bank transactions be opened and accessible to Franklin’s heirs. Edward is asking to be heard next month in Oakland County before Judge Jennifer Callaghan.

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“I guess it is a rather routine motion — but I don’t think there’s anything that can be called routine in the Aretha Franklin probate,” said Craig Smith, Edward Franklin’s attorney, who is based in St. Louis.

“We feel it is best to keep everyone advised on a regular basis,” Smith said. “We aren’t asking for daily reports, but we feel it is not unreasonable to have timely reports made available. I guess it will be up to the judge to decide what is reasonable.”

“We haven’t been denied anything … but we feel it would be good to have a ruling to avoid any potential future issues.  Yes, there is no will, but there is also no spouse or parents. There are her four sons — four brothers, who each represent a quarter of the estate — and who all get along. I believe we will work everything out.”