The ongoing legal dispute between Michael Jackson's estate and the IRS is preventing the funding of trusts for his beneficiaries, including his mother Katherine and his children Paris, Prince, and Bigi, according to a recent legal filing by the estate's executors.

The dispute arose from an audit of the estate's federal estate tax return by the IRS, which claimed that the estate undervalued its assets and owed an additional $700 million in taxes and penalties. While the estate initially disputed these assessments and won in tax court in 2021, there are still pending matters, particularly regarding the valuation of Mijac, Jackson's music catalog owned by Sony Music.

Until the value of the estate for tax purposes is determined and agreed upon by both the IRS and the estate, the funding of the trusts cannot proceed. Additionally, a portion of the estate is requested to remain subject to administration by the California Franchise Tax Board until all legal issues are resolved.

The executors, John Branca and John McClain, rejected the request to distribute a portion of the estate, stating that they cannot determine a safe amount to distribute at this time. Moreover, the trust requires that 20% of the estate, as valued for federal estate tax purposes, be distributed to charity before the remaining assets can be distributed to the sub-trusts. Therefore, a resolution of the dispute is necessary to determine the charitable contribution.

In the meantime, the estate continues to provide for Jackson's children and his mother through the family allowance, ensuring they are well taken care of, as per the estate's statement to PEOPLE.