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John Denver's Family, U.S. in a Tax Dispute

Courts: His children deny that the value of the late singer's estate was understated and about $1.5 million is owed.

June 26, 2002|JAMES BATES | TIMES STAFF WRITER

In life, the value of John Denver's work was argued by critics and fans.

Now, in death, his family and the Internal Revenue Service are debating it.

According to U.S. Tax Court documents, government officials said the value of Denver's $19-million estate was understated to the tune of $2.5 million. That translates to about $1.5 million in back taxes owed.

The principal disagreement involves the value of Denver's record label, Windstar Records, as well as Windstar Productions, a company that handled Denver's business and management affairs before he died Oct. 12, 1997, when an experimental plane he was piloting crashed into Monterey Bay.

The IRS contends the companies were worth about twice what Denver's estate values them at, with the agency estimating Windstar Productions' worth at about $4.6 million and his record label at about $893,000.

Windstar Records does not include the valuable catalog of original hits Denver recorded during the 1970s when he was briefly the industry's top-selling recording artist.

Denver's hits included "Rocky Mountain High," "Thank God I'm a Country Boy," "Sunshine on My Shoulder," "Annie's Song" and the Peter, Paul and Mary hit "Leaving on a Jet Plane."

That catalog still is owned by RCA Records, where Denver recorded for 20 years before being dropped in 1987 when his sales lagged. Nonetheless, Denver remains one of RCA's best-selling catalog artists, a spokeswoman for the company said.

Denver, who was born Henry J. Deutschendorf Jr., was frequently the target of barbs by critics who called his music too hokey. During the late 1970s, Denver also had a fledgling acting career, starring in such films as "Oh, God!" and was one of the most prominent entertainers in the environmental movement.

A tax appeal was filed by Denver's two adult children, Zachary and Anna Deutschendorf. The two also are disputing an IRS ruling denying nearly $2 million in deductions.

No date has been set for a trial, but earlier this month court officials decided it would be held in Denver. John DeBruyn, who represents the estate, declined to comment on behalf of Denver's children.

An IRS spokesman also declined to comment, citing agency policy barring comment on individual tax disputes.

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