In an interesting turn for documentarians, a US Tax Court Judge, Diane Kroupa, has suggested that documentaries mainly serve to educate rather than to make money. That assertion potentially relegates documentary filmmaking to the status of hobby in the view of the IRS. With such a ruling, expenses would no longer be tax-deductable, making any documentary maker subject to much higher taxes.
This was not a final ruling, but a statement made during the course of a hearing; the actual ruling is due in the summer.
The International Documentary Association has filed an amicus brief in the case, urging the US Tax Court to recognize that the production of a documentary film is, at its core, a “for profit” business such that business expenses are deductible for tax purposes.
While it makes sense that the IRS can rule ventures a hobby on a case-by-case basis, to right off a whole category of business as education - and therefore a hobby - seems like a big stretch. It might also be an interesting piece of news for the publishers of most newspapers. Does this mean anything connected to education is not done to make money?
IndieWire: If You’re a Documentary Filmmaker, You Could Owe the IRS a Whole Lot of Money
IDA Documentary.org: Amicus Brief Filed in Support of Lee Storey/Doc Filmmakers
NothingButTheDoc: Doc News: Federal Judge Labels Documentary Filmmaking a Hobby; Freetown Christiania; YouTube