IRS Bothering House Concert Presenters

Subject: RE: IRS Bothering House Concert Presenters
From: Barry Finn
Date: 17 Nov 07 - 08:40 PM

If you pay under $600 within 1 fiscal yr (Jan 1-Dec 31) there is no need to send a 1099 & there is no reason to report it either.

Barry

Subject: RE: IRS Bothering House Concert Presenters
From: Phil Cooper
Date: 17 Nov 07 - 09:35 AM

As a performer at many house concerts, we have always declared the income. That's our responsibility, not the presenters. I would have been glad anytime we made enough to warrant a 1099 form, but I don't think that's ever happened at a house concert.

Subject: RE: IRS Bothering House Concert Presenters
From: JohnInKansas
Date: 16 Nov 07 - 07:37 PM

Go to:

IRS Forms and Instructions

(Use Ctl-click to select non-contiguous items):

1. Select forms showing "Form 1099" without additional "dash numbers" for general information.

2. Select forms showing "Form 1099-MISC" for any years in which you might be affected.

3. Select forms showing "Form 1096" for any years in which you might be affected.

You should get "general instructions," instructions specific to the "1099-MISC," and "sample forms." Both forms and instructions change yearly, so you should check back frequently.

In general, you have to send a Form 1099-MISC to each person who receives reportable income from you.

You must also send, to the IRS attached to a Form 1096, a copy of each 1099-MISC that you send to anyone.

A particular and unique "pain in the ass" is that you CANNOT USE DOWNLOADED FORMS for the Form 1096. You must get an "original" from IRS in order to send your report of 1099-MISC income that you pay to people. If their scanner fails to read the form you send in, they fine you $50, and they use "magnetic ink"¹ so downloaded forms or other copies that you print won't scan.

¹ It's not really "magnetic," but the specification for how to print a usable form runs about 300 pages, according to my recollection from when I checked a couple of years ago. You can't do it at home.

You do NOT generally have to use the official forms for the 1099-MISC reports that you send to the people you have paid, or for the copies you send to the IRS, but the "form" that you use must indicate that it is a 1099-MISC report and the proper line numbers and descriptions (as they appear on an official form) must be clearly shown. A couple of lines may be required even if there are no applicable payments, so read the instructions carefully.

You MUST SHOW A TAXPAYER IDENTIFICATION NUMBER on the form for each person to whom you make reportable payments. For most people, this is their Social Security Number. There is a very high probability that IRS will contact you and demand any omitted identification numbers.

The "investigation" at the border quite probably comes from the requirement that anyone not a citizen of the US must have an appropriate "work visa" in order to legally be paid for just about anything. It probably is illegal for them to receive payment, and for you to make payment, without appropriate prior arrangements. As I haven't run into a need to know, I don't have information on what limitations on earnings apply, or on what arrangements must be made. Given that there has been significant contention between Homeland Security and IRS about the lack of access to IRS information by Homeland Security, it is doubtful that information would be sent to IRS, but the immigration people can be a lot nastier than even IRS if they're offended.

I also don't know whether a visa number (assuming they're numbered?) would meet the requirements for a Taxpayer Identification Number; but the requirement to report any payments gives IRS a means to independently discover "illegal workers" and/or illegal payments, and if you own or rent a home, they know where you are.

John

Subject: RE: IRS Bothering House Concert Presenters
From: Sorcha
Date: 16 Nov 07 - 07:33 PM

Could Sinsull maybe send the tiny little nuns to the IRS in lieu of money?

Subject: RE: IRS Bothering House Concert Presenters
From: JohnInKansas
Date: 16 Nov 07 - 07:27 PM

There have been numerous reports of persons impersonating IRS agents/agencies as scams to obtain personal information for purposes of identity theft crimes. The IRS has published some warnings for specific cases in which both email and snail mail approaches have been found.

While I haven't heard of any "personal appearances" in which fraudulent contacts have been made, it is exceedingly rare for an IRS agent to "show up at your place of business," as they simply don't have enough agents to do that. They DO NOT send notices by email, but may mail you a demand for information, or a demand that you come to their office.

You DO HAVE THE RIGHT to demand identification from anyone claiming to represent a US Government agency.

In the case of anything received in the mail, you can, and in case of questionable demands should, independently contact a known IRS office and request verification that what you see is from an authorised agent and is for IRS official purposes.

John

Subject: RE: IRS Bothering House Concert Presenters
From: GUEST,anonymous, for obvious reasons
Date: 16 Nov 07 - 03:23 PM

Very good advice about the FICA tax (that is, Social Security tax), especially when FICA is part of your "self-employment tax."

My wife quit her last tax-withholding "day job" years ago, to be a stay-at-home mom for a while, and then very gradually began making a little self-employment money. We didn't get a business license, nor declare income for taxation, for several years ~ not until the kids got a little older and her work became more of a full-time occupation.

Since then, we've been compliant and law-abiding taxpayers; for a few years before "coming out," we did enjoy a bit of undeclared income, but really not very much, and certainly never much more than could have been legitimately written off as business expense.

Now, she's become disabled while still in her mid 50s, and hasn't paid enough into Social Security to qualify for disability payment. Had she remained healthy and kept her business running for another decade (i.e., until normal returement age), we would have continued to declare her income, paid the FICA (even in years when business income would have been low enough to minimize income tax, which is different), and she would have qualified for social security retirement. Indeed, if she would have remained ablebodied for just a few more years before succumbing to disablity, our payments into FICA in her name would eventually have sufficed for disability eligibility.

Subject: RE: IRS Bothering House Concert Presenters
From: GUEST,Songster Bob
Date: 16 Nov 07 - 02:47 PM

I used to be a working musician (instead of a bureaucrat who also works at music) and I reported my income (it was always miniscule, each year) from teaching & playing (it was mostly teaching). Because I reported income, I deducted travel, instrument depreciation, parts & supplies, advertising, etc., and kept records of same.

The result is that each year I paid a small income tax, or no income tax (in bad years), and my FICA tax. Because of doing this, I am now collecting Social Security that I would not have collected had I not crossed those T's and dotted those I's. There are times when following the law, scrupulously, helps a lot "down the road."

The rule of thumb is you must show a profit in three of five years, if I recall what the thumb said in those days. It may be different now. But you should be careful to pay your FICA tax. To paraphrase a lumberjack song:

Pay your money when you're young, me boys,
You'll need it when you're old!


Bob

Subject: RE: IRS Bothering House Concert Presenters
From: GUEST
Date: 16 Nov 07 - 02:02 PM

Poppargattor
I believe you have only a 3 yr time span to run in the red

Subject: RE: IRS Bothering House Concert Presenters
From: katlaughing
Date: 16 Nov 07 - 01:58 PM

We never had a profit when operating a small music business for my brother. We had an offifical business ID number and filed every year. The one thing I know they are sticklers on is that any space you claim as business space, i.e. home office, has to be used for that business only, no doing personal letters, etc. on the business computer, etc. Don't know if it is still that way nor how they would enforce it.

Do you suppose "madams" can write off the cost of condoms and who would count them? Ugh!

Subject: RE: IRS Bothering House Concert Presenters
From: PoppaGator
Date: 16 Nov 07 - 01:29 PM

I'm sure that you do not need to claim non-profit status in order to run a business that "tries" to make a profit, but that can document that it just barely breaks even. You can even show a loss pretty much any given year, and thereby reduce the taxes you owe based on your day-job income, or whatever other income you may have.

A small home-based business showing little or no profit ~ especially when new ~ is not going to raise any red flags with the IRS. Indeed, setting up such an enterprise as a justification for writing off much of your normal spending as "business expense" is a time-honored American tradition that is certainly well-known to the IRS, and they generally tolerate it.

Now, if you go on and on for years without ever becoming profitable, you will raise one of those red flags, resulting in an audit. I hesitate to suggest a firm figure, how many consecutive years you can get away with declaring losses. I do feel confident in suggesting that you pick a year, during your first 4-5 years of operation, when you can afford to show a modest business income on which you pay a little tax, and then go back to losing and break-even years for another period of time.

Disclaimer: All of the above presupposes, of course, that the figures you declare each year would be true. That shouldn't really be a problem for house-concert presenters, though, should it? None of you doing this is getting rich from your efforts, are you?

That snooping at international borders is pretty obnoxious, of course. It may become an unfortunate fact that folks will have to come into some sort of "compliance" with government demands on that score. If things come to a point where a home-based presenter is forced to withhold taxes from a performer visiting from another country, I'm sure that methods will be invented for somehow counterbalancing things, minimizing the tax burden as much as possible and sharing it among attendees, hosts, and performers.

Subject: RE: IRS Bothering House Concert Presenters
From: Rabbi-Sol
Date: 16 Nov 07 - 12:22 PM

Here in the USA if you want to become a non-profit entity it is going to cost you lawyers and accountants fees and those services do not come cheap. Also you have the hassle of filing annual reports.

                                                       SOL

Subject: RE: IRS Bothering House Concert Presenters
From: Grab
Date: 16 Nov 07 - 07:28 AM

Surely this has got to depend on how much money is involved. If this is Joe Folksinger singing for his mates and just covering the cost of coffee, then that's a rather different situation from someone doing professional gigs in a house concert situation (eg. the Berrymans).

And really this is regardless of profit. Even if you're not making a profit, once there's significant money passing through your hands then it's worth telling Mr Taxman about it, to keep the buggers off your back.

FWIW, if you're doing significant amounts of this then it might be in your interests to set up a small company to handle your music-related stuff. Instruments, PA gear, food and drink for concert-goers and any other costs involved in your music then become tax-deductable business expenses, which in the UK gives you 22% extra purchasing power. The downside is that you need to declare any profits for tax as well, but if you're a gear-head like me then your profits are likely to be small compared to your equipment purchases! :-)

Graham.

Subject: RE: IRS Bothering House Concert Presenters
From: Rabbi-Sol
Date: 15 Nov 07 - 10:59 PM

Revenue Canada (their counterpart to our IRS) is doing the same thing to their house concert presenters who are hosting performers from the USA. They want them to withold 15% of the performer's take for the evening. Their border guards are also scrutinizing our performers, probably in retaliation for what Bush is doing to their artists.

                                                   SOL

Subject: RE: IRS Bothering House Concert Presenters
From: Bill Hahn//\\
Date: 15 Nov 07 - 10:54 PM

While not a tax expert or attorney I understand, from a company I deal with, that a 1099 has to be filed by the hiring party if the ANNUAL compensation is over $1000. Below that---nothing.

Witholding has nothing to do with this whatsoever.    I do believe, however, that house concerts can run into problems with insurance companies should there be an unfortunate accident at the place. I doubt a Homeowners policy would cover it unless there was a rider in place.

As for the Canadian performer mentioned by Sol and the sharing w/ other agencies (see above)--I doubt that the IRS is involved in that unless other issues arose that, say, FBI was interested in.

Bill Hahn

Subject: RE: IRS Bothering House Concert Presenters
From: Seamus Kennedy
Date: 15 Nov 07 - 10:25 PM

Desert Dancer is correct. $600 is the amount.

I had a run-in with the IRS many moons ago, and I don't mess with them.
Pretty much everything I do is documented minutely.

So if I do a house concert for Sinsull, say, and earn $200 at the door, then she doesn't have to file a 1099-MISC with the IRS (or me), but I have to declare it as part of my income.

Some of the house concerts I perform at are not publicised by the organizers because they don't want hassles such as this.

Seamus

Subject: RE: IRS Bothering House Concert Presenters
From: SINSULL
Date: 15 Nov 07 - 07:32 PM

I do know that some UK performers made it clear that they wanted a song circle not a concert and it was because of their VISA. Some actually gave away CDs and would not accept money.
So does this mean I get to write off the cost of food and drink, the electricity and water used, the rent of bed space????
If it gets too difficult, obviously I will stop hosting concerts.
By the way the only concert that exceeded $200 was for an artist who had a formal contract, an agent and careful records for the IRS.

Subject: RE: IRS Bothering House Concert Presenters
From: katlaughing
Date: 15 Nov 07 - 07:21 PM

That's what I last knew it to be also, Becky.

This is unbelievable. Do they stop every one who is coming to the USA to perform a job: the business executive coming for a meeting, the academic coming to teach, etc. and make them show contracts, etc.?

Time for things to go underground, so to speak. Notify by PMs and take things off the websites. Jiminy Cricket!

Subject: RE: IRS Bothering House Concert Presenters
From: Desert Dancer
Date: 14 Nov 07 - 10:43 PM

As I recall (and this is from several years ago) the minimum required for a 1099-MISC is $600 or more to one person in the course of a year. If you're getting that much at a house concert, goodonya. If not, the IRS should get their ruddy noses out of it.

~ Becky in Tucson

Subject: RE: IRS Bothering House Concert Presenters
From: Sorcha
Date: 14 Nov 07 - 10:30 PM

So, SINSULL had better watch out?

This is just bloody ridiculous. Off with their heads I say! OFF!

Subject: RE: IRS Bothering House Concert Presenters
From: Rabbi-Sol
Date: 14 Nov 07 - 10:09 PM

House concerts are becoming increasingly more popular every day. If you go to a performer's website you will see at least 3 or 4 house concerts listed on their calendar. The IRS is aware of this as well.
Last week I had a folksinger from Canada visit me. She told me that when she crossed the border the (Homeland Security) inspector went to a computer and Googled her name. He immediately went to her website calendar and asked to see the contracts for each gig that she had listed. He then proceeded to photocopy each contract and informed her that Homeland Security does share this information with other government agencies. Although he did not specify IRS she did have her suspicions.

                                                   SOL

Subject: RE: IRS Bothering House Concert Presenters
From: Don Firth
Date: 14 Nov 07 - 09:58 PM

Thanks for the heads-up on this, Rabbi-Sol. There are a couple of people I know who should be aware of this.

(Bloody revenuers!!)

Don Firth

Subject: RE: IRS Bothering House Concert Presenters
From: Art Thieme
Date: 14 Nov 07 - 09:41 PM

Absolutely insane!

Subject: RE: IRS Bothering House Concert Presenters
From: GUEST,leeneia
Date: 14 Nov 07 - 09:20 PM

If John pays Martha to do a job, then John should file a form 1099-Misc. However, there's got to be a minimum below which the form is not filed. We do not, for example, inform the IRS every time we pay a teenager to babysit for an evening.

At casinos, I believe the minimum is $2000. I doubt if any house concert ever paid anything like that.

If I were holding house concerts, I would find out what that minimum is, then keep a simple record of the take for each concert and where it went. If questions are raised, I would have the answers.

Subject: RE: IRS Bothering House Concert Presenters
From: Deckman
Date: 14 Nov 07 - 08:41 PM

I feel a song coming on ....?

Subject: RE: IRS Bothering House Concert Presenters
From: Rabbi-Sol
Date: 14 Nov 07 - 08:08 PM

Our illustrious president knows that the the folk music community does not like what he is doing in Iraq. I am sure that he is aware of the plethora of songs that have been written on this subject. Now it is payback time.

                                                    SOL

Subject: RE: IRS Bothering House Concert Presenters
From: Rapparee
Date: 14 Nov 07 - 07:52 PM

So if, say, Bob Nelson came over from Seattle to do a concert at my Library (free for nothing because he's a swell guy!) and then did an impromptu house concert at my place he could get in trouble with the IRS?

Geez, what hath the Goddamns wrought?

Subject: RE: IRS Bothering House Concert Presenters
From: Rabbi-Sol
Date: 14 Nov 07 - 07:46 PM

Apparently they are getting on some agent's websites and following the concert calendars of the various performers that they represent.
Performers who are coming from outside the USA (Canada, UK, etc.) must file union contracts in order to obtain visas. Apparently the IRS has knowledge of those contracts.

                                                    SOL

Subject: RE: IRS Bothering House Concert Presenters
From: Rabbi-Sol
Date: 14 Nov 07 - 07:41 PM

Deb,
    Go to the Yahoo House Concert Board. You have not been on there for a while. There is a whole ongoing thread about this.

                                                    SOL

Subject: RE: IRS Bothering House Concert Presenters
From: katlaughing
Date: 14 Nov 07 - 07:36 PM

How are they finding out about the house concerts? Do they have agents running through everyone's websites looking at the gig listings?

Even when my brother played in coffeehouses, they just put out a donation jar and the money went directly to him. I don't know how they'd expect the business owner to know how much there was.

Oh, well, they need those billions to pay for the war...this will sure fill those coffers quickly.

Subject: RE: IRS Bothering House Concert Presenters
From: DebC
Date: 14 Nov 07 - 07:33 PM

Hey Sol,

Where is this information coming from? I think I am on some of the same lists that you are on and I haven't seen this, but then again, I may have missed the discussion.

Now there *has* been a discussion about the PROs (ASCAP, BMI) hasseling some house concert presenters and that was discussed in a Folk Alliance List discussion.

Deb Cowan
www.DebraCowan.com

Subject: RE: IRS Bothering House Concert Presenters
From: Rapparee
Date: 14 Nov 07 - 07:31 PM

Bloody lovely. Just bloody lovely.

Subject: IRS Bothering House Concert Presenters
From: Rabbi-Sol
Date: 14 Nov 07 - 07:27 PM

Several house concert presenters have recently been contacted by the IRS about witholding tax on monies paid to performers. Also some state tax agencies, most notably California are doing likewise. The house concert performers are claiming that the musicians are independent contractors and therefore not subject to the witholding tax. In this case the IRS wants the hosts to issue a form 1099. The house concert hosts have counter claimed that they put out a donation jar which is turned over to the performer after the concert and do not handle any money or even know how much is in the jar. Therefore it is the performer's responsibility to declare it and not the host's.
California is also looking to collect sales tax on the merchandise and CDs that the performers are selling during the house concert. Other states may follow suit.
                                                   SOL