Dear Fellow Artisans,
As I was saying yesterday, our last IRS audit was conducted by a nice lady who tried to understand my wife's and my occupations and proceed from there. But this year's auditor is interested in succinct data to fill each field on the computerized form. "In this business you operate as a self-employed musician, where do you go to play music?"
"Um" – how to put it? – "bars."
"No, what I mean is, your engagements, do they take place primarily in and around Chicago?"
"No, they take place all over. Mainly in the United States."
"And who comes to hear you play?"
Again I am unsure what to say.
"For instance, do you play primarily for children?" The kinder, gentler, post-1998 tax examiner always keeps helpful mind-jogging instances at hand.
"No, primarily for adults. I put out records and theoretically people develop an interest in attending one of my shows after having heard a record."
"I see." He types the word "general" in the field and moves on to the next. "Who handles sales and production, would that be you?"
"You mean of the records? The records are produced, I guess you would say, by the record label. I sell some myself from the stage but most of the sales take place in stores where people go to buy records" – I am still trying to find a suitable diction for this weird discourse – "and are accounted for by the record label."
He types "lable" after the prompt "Sales" and "label" after the prompt "Production," and after comparing the effects, corrects the first. I am wondering how to get this on track. That no one outside of one's profession has a clear understanding of what one does, or how (or sometimes why) one does it; that one is condemned by one's occupational culture to exile from ordinary society; that one is, with one's casual attire, slouched posture, and stammering difficulty in answering a few generic questions, naturally ridiculous in the eyes of decent citizens; one must accept these symptoms of an ordered society with forbearance. But unfortunately, one also becomes inured to a special status that is usually easy to invoke when necessary. Look: I make records! I travel around entertaining people – not a lot of people, to be sure, but they are spread all over 48 states! I am written about in magazines! I'm even on the electric TV!
"Now, let's look at some of your Schedule C deductions. First, you reported $9,091 in travel expenses. What were those?"
I produce four thick manila folders full of tour receipts and income/expense breakdowns by month. "That's for hotels. Here are the receipts."
"These are hotels for..."
"For when we go to play our shows, which are attended by adults, and which occur mainly outside of Chicago. Afterward we sleep in hotels."
"'We' is who? You and your band?"
"Yes."
Another sorrowful shake of the head. "The only allowable travel-related deductions are for yourself."
"I'm sorry?"
"You can't deduct others' expenses, unless they're your employees. The law is very clear on that point. Are these people your employees?"
The sickening sound is my all-encompassing love of life collapsing into a slough of despond. My wife steps in.
"These people are not our employees. Let me present a clear picture of our operation for you. We are not the Rolling Stones here. We are a small family business. We cannot afford to pay the people Robbie takes on the road Medicare or Social Security, nor do they expect us to. They are indispensable to my husband's career. He releases records featuring group performances, and so he needs to tour with a group."
"Then the group needs to pay their own way and claim their own expenses on their own returns."
"Musicians are not going to cover their own travel expenses! That's just not how! It! Is!"
"Well, I suggest you try looking for some different musicians. I'm sorry, but it's very clear." He reads a passage from a book which says what he just said, that travel deductions must be one's own or one's employees.
"Look," says my wife, trying a different and more fruitless tack, "this is what everyone does. And we ourselves have done this for years. Our travel expenses for Robbie's band passed our last audit, and passed two different, experienced tax preparers."
"I can't speak for what happened at your last audit, or what you have done in the past. Sometimes," he confides, "low-budget tax preparers are unreliable."
"This is absolutely insane," I suggest. "First of all, Geffen reimbursed me for all these expenses, and their reimbursements are reported here as income, so under your scenario I'm taxed on the reimbursement but can't claim the original expenses I paid out of pocket. Second, this tax law is plainly meant to cover pager-wearing schmucks who go to Cleveland for a seminar, not rock bands. It's not business-related travel, my whole business IS the travel. I have tens of thousands of dollars in expenses for my band, going back for years – not just hotels but air fares, cabs, drum heads, and a dozen other things." Maybe I shouldn't be saying all this.
"And none of that is allowed," smiles Kelvin Peterson. "You can't deduct other people's expenses. It's just absolutely clear. After all, how do I know that your band isn't claiming these same expenses on their returns?"
"What do you mean?" I pull from a folder a few pages of meticulously Scotch-taped hotel receipts. "I have the receipts! Here they are! Anyone else that claims these 2 rooms at the Red Roof on August 9, 1998 in Trenton is clearly incorrect!" I am kicking at his desk impatiently and gesturing heatedly.
"Do not get angry at me, Mr. Fulks. I did not write the law. Talk to your congressman."
Neither of us can think of any other line of reasoning, and we can see little profit in continuing to object to something so clear.
"I'll ask my supervisor to confirm the law if you like." We nod mutely, and are left alone all of a sudden, Donna and I. There was, as Dorothy Parker put it, a long silence with things going on in it. After a minute I mumbled timidly, "Are these car dealer-type stunts or what? First the how-generous-I'm-feeling bit and now this. If he comes back saying 'Well, this is really your lucky day,' I'll asphyxiate him with my long form." (Tax jokes are usually a bit labored.)
But he returns without any developments to report, and informs us that it is time to move on to my mileage claim, which is 41,394.
"Were all these miles on one vehicle?"
"Yes."
"Did you use that vehicle for any non-work-related driving?"
"No."
"Did you keep a mileage log?"
"Yes."
"Let's take a look."
I recorded my mileage in my calendar book. At the end of every trip, on the page with the date on which I got home, I wrote down the miles driven with a box shape around the figure. Two-hour trip, number in a box; month-long trip, number in a box. There are perhaps 60 numbers in boxes. I read each one to Kelvin Peterson, slowly and deliberately, while turning 365 datebook pages slowly and deliberately. He runs an adding machine tape. The miles come up about 1,000 short.
"Well, that's odd," I say. "Maybe I missed one. Shall we double-check our work?"
He sighs, runs another tape, and I read through the book a second time, not much faster, and the number doesn't change. The return is adjusted accordingly. Kelvin Peterson's patience is being strained, and you can see some cracks, just barely. As for me, I'm not even here anymore. I am mildly interested in what magic sum will be declared at the end, but, despair having set like cement in my head, I would like to amuse myself for whatever time remains by playing daft and throwing spanners. When he turns to the meals deduction, which is based on the number of days out of town, I ask Donna whether she brought that sheet where I tallied my travel days. No, she didn't, and we go back to the datebook and count out 196 days, page by page, at the speed of mammal evolution. A couple times I lose the count – "47, no, wait, did I already say 47?" – but Kelvin Peterson sticks doggedly with me as he runs the tape. After this exercise he asks for the 1099's I filed for my band. "Um, did you bring those?" I ask Donna. Kelvin Peterson doesn't wait for the answer. He goes away again. I turn to Donna.
"What were we thinking? We should never have come here without bringing someone to speak for us, someone to speak to this man in his own tongue and find whatever fucking hidden clause it is that lets us earn a living the way we earn it and keeps the fucking IRS off our backs. We're over our heads and out of our element. And that sandwich is making me sick. Something was wrong with it."
"If he's right about your deductions, what are we going to do?" Donna says. "You can't go out on the road anymore if you can't claim most of the expenses."
"He's not right, and I can claim them, and what we're going to do is research case law, consult a half-dozen different tax lawyers and accountants, talk to other bandleaders who've been audited, and then appeal. We're going to spend half our productive time for the next month on this horseshit. We can't come back to this on our third audit." Almost everyone we know who has been audited once has been audited twice more.
"I think," Donna lowers her voice to the faintest whisper, "he's not going to ask you for documentation on your per diems." We haven't been able to locate any corroborating proof of the cash I paid my players in 1998 for meals on the road, and I've claimed (accurately) around $5,000. It was our top worry coming in, unable as we were to foresee the disallowed hotels or the agency paymaster brouhaha.
"I doubt it. I think he just hasn't gotten there." He walks back in, and it turns out he is indeed skimming past the per diems. He's just too eager to get this over with. "I" and "try" and "can" and "anything" have turned to "very" and "tired" and "go" and "home." This is not the sympathetic, soul-of-Job, post-congressional-hearings Kelvin Peterson of three-and-a-half hours back. This Kelvin Peterson stretches his arms languidly and sighs continually. Presently his phone rings. He tells the caller suggestively, "I'll call you back in three minutes."
"Are we through in three minutes?" my wife pipes up.
"I was using a turn of phrase," Kelvin glowers. But we are done in 15. The bill is $966. We ride home through rush hour traffic. As we pull in our driveway a girl from the neighborhood, a pretty 14-year-old with a somewhat confrontational style, is hanging around our lawn on her bike. People are hanging around our house a little more in the last week, since I did the Conan O'Brien show.
"I just wrote two songs," she tells me.
"I didn't know you were a songwriter. What are they called?"
"One's called 'Country Hillbilly' and one's called 'Down Town South.'"
"That's funny."
"I've got a lot of songs," she says. "Not all of them are finished."
"Stay out of the business," I advise her.
Robbie
