THE SIX STAGES OF PRODUCTION:
- Wild Enthusiasm
- Total Confusion
- Utter Despair
- The Search for the Guilty
- The Persecution of the Innocent
- The Reward and Promotion of the Incompetent
IRS Rules for Personal Corporations fuzzy as ever.
Many of those in the entertainment industry operate as incorporated professionals. We’ve had several articles on the various aspects and benefits of incorporating your business. Every actor and director I know is a company and “loans out” the services of it’s principal.
Enter the IRS There is some recent interpretation of the tax code as it relates to the “personal holding company”. If this affects you, or your entity, see the complete sections 541-547 of our famous tax code. As always, responses to inquiries are met vaguely and even if you get a ruling, there’s no guarantee that the answer provided will stand in the future. Of course the IRS will not put anything in writing, so be careful out there.
The best defense to this problem is keeping your corporate entity clean of any co-mingling of funds, and by all means you should make sure that you have the appearance of actually doing business. Invoice for your equipment, NEVER attach a “kit rental” to the time card, and try to have multiple sources of income. Finally, do not attach your name to invoices for services. Try to invoice your clients generally. State the work performed, not who did it. Most production auditors know who you are and could care less. Upon examination, this minor semantic matter will likely save you from penalty.