Why Isn't This Fraud IRS?

WILLIAM G. HALBY, a lawyer in New York for 40 years, specializing in tax law, frequented prostitutes and kept track of his visits in a journal and purchased pornography and books and magazines on sex therapy, apparently keeping decent documentary evidence of the costs. He then claimed medical expense deductions of $76,314 in 2004 and $49,203 in 2005 for these costs.

Fraud and Other Stupidity

Ron and Tricia Bell got greedy. They faced additional taxes and penalties, including ones for fraud. The Tax Court reached a decision on Wednesday.

Big bucks. Interesting story . . . well, maybe not so much. Use your imagination. Check it out if you are interested in cheats.

Another Doctor Claims His Wife's Horse Losses

Wednesday, the Tax Court issued an opinion in a case involving another doctor whose income supported his wife's horsey losses that the IRS said were hobby losses. See the Phemister case to read about it. The case also covers innocent spouse, failure-to-file, and negligence penalty issues.

A New Tax Book

I haven't posted here in quite a while. It hasn't felt very compelling to do so. It's not that there isn't plenty to say, or news that breaks every day relative to the tax aspects of writing or other artistic activities. It just hasn't stirred my interest or seemed very productive over against other things I've been doing.

However, lately I've been thinking about another tax book for writers and artisans. What I have in mind is collecting information from authors and artisans who have had experiences with the IRS. Or even those who haven't. What I don't know, I guess, but want to, is what people entering into the business of writing or an artistic activity do with respect to the costs they incur before they have enough income to have a net profit. Do they utilize the tax benefits of such losses? Or do they mostly just forgo them and concentrate on getting to a profitable status before worrying about taxes? I would like to do an exposé on such information and experiences, if possible. If everybody who writes and gets published is filing tax returns with losses reflecting their costs in advance of profitability but not having any problem with the IRS, it seems that would be invaluable information for newbie writers and artisans to have. And what about all the people who never get published or get their artistic endeavor off the ground, but incur costs trying to do so? Are they claiming the tax benefits and getting away with it without a challenge or are they challenged? And, if they are challenged, what is the result?

Anyway, that's what I've been thinking about. Maybe it's something useful; maybe it's not. How would I go about gathering the information? Most writers these days maintain personal blogs and webpages. There may be okay to make contact that way. Also, I might formulate a questionnaire or something to help gather pertinent information.

Also, it might be interesting to explore what types of deductions experienced and successful, profitable, writers claim relative to their tax returns and their experiences relative to such claims over against IRS and audits. I'm thinking along the lines --- and this is a somewhat dated, even out of date, example --- of somebody like James A. Michener. He must have incurred many living expenses in being away from home in doing his research to write in depth about such localities as Mexico, the South Pacific, etc. How much of what he incurred did he deduct? And I need to find contemporary authors to query in such matters.

Just some thoughts.