Unless you’re Michael Moore, documentary filmmaking isn’t the most lucrative endeavor, but at least, it’s a business.
Or is it?
If you were to ask U.S. Tax Court Judge, Diane Kroupa, the answer is well, maybe, maybe not.
Kroupa is questioning a tax case in Arizona involving the merits of a documentary filmmaker’s ability to claim business tax deductions, and has stated that the purpose of documentary filmmaking is to educate the public, and not to make a profit.
Quintessentially, if she chooses to rule accordingly, such films would be considered a hobby.
The case involves documentary filmmaker, Lee Story’s 2009 film “Smile ‘Till it Hurts: The Up with People Story.” Story has claimed hundreds of thousands of dollars in tax deductions and will have to pay back these deductions and additional penalties if Kroupa’s rules against her.
Kroupa’s decision will have a major impact on documentary filmmakers, who already struggle with paying for their film productions and promotions.
In response, the International Documentary Association has issued a letter in Documentary magazine from executive director Michael Lumpkin, who writes, “The potential affirmation of Judge Kroupa’s statement could have a serious impact on documentary filmmaking in America by creating federal case law precedent that could be used against filmmakers, bringing about audits and demands for back taxes because of a characterization of documentary filmmaker as meriting nonprofit status.”
To demonstrate that documentary films do indeed, turn a profit, Story will sell DVDs of her film on her website with the hopes that Kroupa would recognize her error for likening filmmaking to stamp collecting.