Course blog for American University PERF-570, Fall 2014
Susan Crile, an artist and professor at Hunter College, was suspected of underpaying her taxes because she had itemized deductions for the materials she used for her paintings and prints. The IRS claimed these deductions were not legit because her art was “not an activity she engaged in for income” (though she did make $81,000 off of it over a five year span) and because she did not have a structured business plan. The agency was claiming that the lack of *structure in her art business meant that it was not a real business.
This past Thursday, the IRS was proved wrong. In tax court it was decided that Ms. Crile “met her burden of proving that in carrying on her activity as an artist, she had an actual and honest objective of making a profit” and thus is a professional artist in the eyes of the government. During the hearing it was highlighted that “art is not a business like other businesses” and should be treated as such.
I am in agreement that the art industry is not like any other industry. We have idiosyncratic goals, structures, agreements and funding. Due to this unique format, artists and arts managers need to be extra vigilant of their financial practices; we are an easy target for misunderstandings and need to be prepared to defend our business and its expenditures. There will always be questioning of what we do and why we do it that way. This article serves as a friendly reminder that a clear and “structured business plan” (and good documentation) are essential when coexisting with government.