When You Lose Your Tax Records…

IRS Rules Stretch Only So Far

Advance Notes: As a general rule, the IRS okays deductions by stock photographers for business travel and entertainment expenses only if those outlays are substantiated by diaries or other "adequate records." But the IRS does make some exceptions.

Among other things, the feds will waive the record-keeping requirements and accept a “reasonable reconstruction" of your records when, according to the agency's administrative regulations, a loss of your records was "due to circumstances beyond the taxpayer's control, such as destruction by fire, flood, earthquake, or other casualty." Not surprisingly, those regulations include a cautionary reminder that whether an event was beyond a person's control depends on the particular circumstances.

Consider, for instance, what happened in a dispute over write-offs for travel and entertainment that pitted the IRS against Joe Gizzi, who acted as his own attorney before the Tax Court. According to Joe, the government acted unreasonably when the examining agent refused to excuse him from the usual substantiation requirements. It seems that Joe had stored records of entertainment expenditures in his home and they somehow vanished after he voluntarily moved out because of marital problems.

Unfortunately for Joe, that explanation got exactly nowhere with the Tax Court, which refused to treat the loss as caused by a casualty beyond his control. "Marital difficulties and their consequences, no matter how seemingly independent of the taxpayer's will, do not sufficiently resemble floods or fire to be considered a casualty," the ruling stated. Moreover, noted the court, even if marital problems provided a good excuse, Joe failed to furnish an adequate reconstruction of his records.

Subsequently, however, in another case, the Tax Court had some second thoughts. It ruled that marital problems caused the loss to be beyond the control of Matthew Canfield, who also represented himself before the court, but did so with more success than Joe Gizzi.

Here, the circumstances differed considerably. Unlike Joe, Matthew did not voluntarily move out of his home and leave his records; he departed because his wife obtained a court order requiring him to stay away from their dwelling. The wife either destroyed or burned his records during the time the couple was separated, and Matthew was unable to enter his home because of the court order.

Note, though, that the Tax Court has no second thoughts where records disappear while a person moves his or her belongings to a new residence. It flatly refuses to allow reconstruction of such records.

Still, sometimes the tax takers try to press things too far. To the surprise of no one but the IRS, the Tax Court relieved Raymond Jackson of the need to produce records that disappeared after he handed them over to a revenue agent during an audit. Result: Raymond was allowed to reconstruct what he spent on entertainment and managed to convince the judge that the disputed deductions were backed up by the lost records.

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Dear Mr. President, Internal Revenue regulations will turn us into a nation of bookkeepers. The life of every citizen is becoming a business. This, it seems to me, is one of the worst interpretations of the meaning of human life history has ever seen. Man's life is not a business.

--Saul Bellow, Herzog (1964)

Julian Block, a former IRS agent and a tax attorney, is the author of "The Stock Photographer's Tax Guide." For details on how to purchase this important 32-page publication: http://www.photosource.com/taxtips.php . For Julian’s tax saving and tax planning reports, go to http://www.photosource.com/products and click on “2004 Tax Tip Guides.” Julian can be reached at julianblock@yahoo.com .

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This week's featured photographer on PhotoSourceFolio:
Wayne Wasechka (http://folio.photosource.com/3013)
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Edward Ewert
Ewert Photography
ed@ewertphotography.com
http://ewertphotography.com/



 

Watch for developments in the field of stock photography in PhotoResearcher's Newsletter

PHOTOGRAPHY IN THE NEWS
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INVITATION TO PHOTOBUYERS. PDN's editors are conducting a Survey: The Real Costs of Digital Capture - a survey on how magazines manage digital capture. Photobuyers! PDN would like you to fill out a confidential survey. http://www.pdnonline.com/pdn/features/
article_display.jsp?vnu_content_id=1003687701

THOSE SHARING PHOTOS. Why Photographers Hate Creative Commons - Creative Commons turned five years old -- five years of phenomenal growth, thanks in no small part to advocates like the photo-sharing site Flickr. An increasing number of photographers -- not just professionals but high-end hobbyists also -- have become disenchanted with the Creative Commons system. http://rising.blackstar.com/why-photographers-hate-creative-commons.html

LOVERS NOT FIGHTERS. Kodak, Matsushita Settle Digital Camera Patent Fight - Eastman Kodak Co., the world's largest photography company, and Panasonic parent Matsushita Electric Industrial Co. settled a fight over digital-camera technology by agreeing to share their patented inventions. http://www.bloomberg.com/apps/
news?pid=20601103&sid=ajSTbquZCJLo

TRAVEL ALERT. Lithium Batteries Banned From Checked Bags. The international rule is intended to lessen the risk of lithium battery fires on airplanes. http://www.informationweek.com/
news/showArticle.jhtml?articleID=205206086

TOO CLOSE FOR COMFORT. More from Photographer of Bhutto Hit: "I Was Splattered with Blood" - Getty Images senior staff photographer John Moore witnessed the chaotic attack that claimed the life of Pakastini political leader Benazir Bhutto Thursday. Moore was just 20 yards away from the suicide bomb that killed more than 20 people. http://www.editorandpublisher.com/eandp/
news/article_display.jsp?vnu_content_id=1003689836&imw=Y

ONLINE SALES UP. Protecting Brand Integrity Online: A New Approach - Good news: E-commerce retail sales in the US are growing at about 20 percent a year-six times the rate of growth in the underlying retail economy. Bad news: Online sales of counterfeit goods are growing at twice the rate of all online sales. At current growth rate, counterfeit goods will outstrip sales of legitimate goods online in 2010 about 3:1. http://pronet.nielsen.com/smallbusiness/content_display/
technology/e3i6e97406a00e0eb19f88b47fb87b2cc8c

NOW YOU NOT ONLY SEE THEM . . . Image Source Invites You To Listen To Its Images - Image Source, the producer of royalty free stock photography, has launched an interactive CD and web tool that uses sounds, dialogue and audio effects to describe images in the company's collection. http://www.creativepro.com/story
/news/26219.html

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The Video Shows You How

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Finding a specific content photo using the Internet.

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Up against a stone wall? Can't find the "just right picture?" We can help.

Search for a photo

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Lela LaBree, editor

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PhotoRESEARCHER Newsletter ?

Go to http://www.photosource.com
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For photo researchers, the Internet has finally matured...

Easy Photo Research

Say good bye to long, harrowing, frustrating searches when you need an EXOTIC, UNIQUE, HISTORICAL, CELEBRITY, SCIENTIFIC, HARD-TO-FIND photo. Now you can use the Internet to quickly locate the source of a hard-to-find image, and save yourself tons of labor and time. And it's FREE. Here's how:

Step 1: Using the popular search engine, Google, type in the words or phrase that describes the picture you need.

Step 2: Then type a space (on the same line), and then the word, photosource. (We have a million and a half text descriptions of available photos.)

Step 3: The source (or sources) of the photo you need will appear on your screen. You can be sure you will be dealing with a qualified photographer. Click on his or her name. When their page comes up, scroll down the page of text until you see your request highlighted in red.

Step 4: Phone, fax, or e-mail the photographer and request a digital sample (or lightbox) to view the image choices. You deal directly with the photographer for payment for the use of the photo. No middleman fees.

For a fast check on how this works, go to Google and type one of the following phrases into the search bar:

To locate a particular town or village:

Summerland Key, Florida photosource

To find an exotic weed, or flower:

Ageratum houstonianum photosource

An historical event:

Emperor Haile Selassie Lighting Bonfire photosource

To find a geographical location:

New Hampshire covered bridge photosource

We’re seeing that the Internet can be a powerful tool for quick and easy photo research.

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“Thank you Rohn. Because of the PhotoSourceBOOK, a specialty publishing house for collector prints contacted me as a result of my listing. Because I have an unlisted phone number, this meeting would otherwise not have been possible.”

- Genoa Caldwell, Archivist,
The Burton Holmes Historical Collection . http://taschen.com

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Melissa Welsh
MELISSA WELSH PHOTOGRAPHY
melissa@melissawelsh.com
http://www.melissawelsh.com/

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TRAVELERS ABROAD

Photobuyers: Watch this column. For the e-mail address, phone or fax number of the traveling photographer, call the PhotoSource International office and ask for Rohn Engh (1 800 624-0266). For an expansion of this list: www.photosource.com and press the Travelers Abroad button, to learn of past international destinations of our photographers.

Fred J. Eckert
January 10 – January 30, 2008
India

Joan R. Saks Berman
January 13 – January 19, 2007
Havana, Cuba

Andy Long
January 25 – February 4, 2007
Falkland Islands, Punta Arenas and Santaigo

Tina Manley
January 26 - February 4, 2007
Lisbon, Portugal

Bert Hoferichter
February 8 – February12, 2008 Quebec City, Ottawa
December 14 - January 15, 2009 Germany

Phyliss Brauer
February 20 – March 19, 2007
Rajisthan and Udipor India

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448B