NY Times on IDA Filing Amicus Brief in IRS case

Documentaries Supposed to Make Money, Court Told

By MICHAEL CIEPLY

LOS ANGELES — Bad enough that documentarians have a hard time getting an audience for their wares. Now the United States Tax Court is raising alarms throughout the documentary world by questioning whether documentary-making can generally be considered for-profit activity.

The International Documentary Association, Film Independent, and several other film organizations joined Monday in an amicus brief urging the court to recognize that documentaries are overwhelmingly intended to turn a profit, even if many of them never do. The stakes are enormous: if documentary-making were generally construed to be more to persuade than to profit, the deductibility of expenses incurred in the making of such films would come into question.

In a statement on Monday, the groups and their lawyers from the Donaldson & Callif firm in Beverly Hills described a brief they filed in a tax case in which the Internal Revenue Service challenged the business expenses associated with the production of “Smile ‘Til It Hurts: The Up With People Story.” While the groups took no specific position on the facts of the case, they strongly urged that the court back away from a judge’s statement, during a trial in March, expressing an inclination to hold that documentaries in general are intended to “educate and expose” rather than make money.

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