Klarinet Archive - Posting 000364.txt from 1995/10

From: "Dan Leeson: LEESON@-----.EDU>
Subj: Re: IRS and the clarinet world
Date: Sat, 14 Oct 1995 11:52:01 -0400

A most interesting article appeared today (10/14) in the New York Times
of which I get the west coast edition every day. It deals with the IRS'
attitude towards violin bows and what happened in a Federal appeals court
with respect to the IRS argument on 10/13.

While, on the surface at least, it does not apply to clarinets, it appears
to me that the IRS is making a push on the deductibility of all musical
instruments and that does impact clarinet players (and, heaven help us,
accordion players too).

Here is the case: the IRS took two NY Philharmonic violinist to court with
the argument that they could not depreciate their bows. (Let me add
that the IRS will attack a very special phenomenon and then apply that
attack to non-phenomenental events). These were very expensive and rare
bows both made by Tourte and the costs were $21,500 for one and $30,000 for
the other. Both musicians were using their bows as part of their daily
working environment; i.e., they were not stuck in a glass case hanging on
the wall purely for show.

The two violinists claimed a deduction from their US Federal Income Tax
based on two assertions: (1) these items were working tools; (2) through
use, the objects deteriorated and this permitted a depreciation of them
as allowed by the IRS for many objects, including clarinets.

Both of these views are consistent with the current laws regarding clarinets
(for example). Reeds are not part of this theory since they do not have
a long-life expectation. However, they are deductible as tools, not as
a deteriorating musical instrument. Reeds are like work clothes.

The IRS rejected the claims of the players saying (1) bows are not tools
because theyappreciate in value and are, therefore, collectible art
objects; and (2) when properly cared for, they do not deteriorate and
cannot therefore be depreciated under the tax code.

FOR THE MOMENT, the IRS has lost. The next step is an appeal to the
United States Supreme Court. It will take years. Be patient. I add
that the final voite of the Federal court was 2 to 1. So they didn't
lose that big.

So I would like to tell you about a very probable, but highly
imaginary meeting several years ago in the offices of the IRS in
Washington. This is a fiction story but it probably happened.

"Gentlemen, we have to find some way to increase our revenue to the
government through taxes. What is not now taxed that might be taxed?"

"Well, sir, I've been looking over the submissions of America's
musicians. I'm speaking about professional musicians, of course, and
I notice that every one of them deducts the cost of their musical
instruments over a ten year period. So if a clarinet costs $2,000,
then the owner (who plays clarinet with the Ellis Island Opera Company)
depreciates that instrument to the tune of $200 a year for 10 years.
Now when that person finishes depreciating the instrument, he or she
will often continue to play it for many additional years, though there
are some people who will simply throw the instrument away and buy a
new one, thus starting the depreciation process all over again. I
think that it is called "blow out" but I am not sure because no one
can tell me what that is and I'm beginning to think no one understands
it in any case."

"Stick to the point, please. Talk about the instrument, not about
blow-out. I think it is called that because you blow out when you
play the clarinet, not blow in. Get on with it!"

"Yes sir. Well, if the instrument has been depreciated, how come
it is still being played? It should have fallen apart. It should
be in shambles on the floor, right?"

"Hm. Interesting idea. Are you suggesting that we go after clarinet
players?"

"No sir. The whole notion of depreciation based on an instrument
wearing out is too entrenched in the world of musicians. Oboe players
do it, trumpet players, etc. No sir. We have to start smaller and
whittle away the general theory by first damaging the special theory."

"So what do you suggest doing? Get to the point already."

"I suggest we address ourselves to the question of musical instrument
parts that are not physically connected to the musical instrument itself.
A musician cannot do without this part but it is not in the definition
of the instrument. For example, a violin is fully defined unambiguously
without reference to a thing called a "bow."

"What do you mean? Do you have an example?"

"Bows sir. Bows!! Do you know that every string player has a bow and
not only do they deduct the instrument every year (may they be cursed
for doing so since it makes our lives harder) but they deduct the bow,
too. That is our attack: BOWS. They don't make any sound, unlike the
instrument itself. They are used to create the sound. Therefore they
are not a musical instrument, they should not be deductible, and we
fight this one up to the supreme court. If we win, we then go after
the instruments themselves by simply expanding the theory; i.e., if
the bow is an appreciable, non-deductible thing (It is NOT a tool.),
then so is the violin, and the cello, and, finally, the CLARINET!!"

"Good man. You are promoted. Your salary doubles. Your perks will
now include a mistress and a private airplane. And the next yacht
we appropriate will be yours. You can keep your mistress on it."

"Thank you sir. I will remain humble despite my new-found success and
I will continue to find other loopholes to seal shut."

END OF FICTION STORY.

They laughed at Christopher Columbus. They said he was mad. They
laughed at Galileo. They said he was mad. They laughed at King
George, III. They said he was mad. He was mad, by the way. So
don't laugh at me. I have already depreciated all of my instruments
and I have sold most of them too. It is you guys and gals that will
have the problem eventually.

Final point: revenue producing administrative pieces of any federal
or state government are charged only with the responsibility of
maximizing the revenue to the government. They are considered doing
a good job, when they achieve that objective. It does not have to
be achieved rationally, it only has to be achieved. A tax on sex
would be terrific for the revenue producing piece of the govt. but
they can't find any way to measure how frequently it is occurring.

Taxes are defined to produce revenue. The more things that can be
taxed, the more revenue that is produced. The tax itself does not
have to be logical, rational, or intelligent. It only has to be
a tax. I remind you that it was a tax on tea (Why the hell would
anyone tax tea??? -- To get money, that's why.) that caused the
American revolution in 1776. The parallel is not exact, to be sure
because the matter had to do with representation, not taxes, but
you can see my point.

The tax theory is simply to get money, not get it rationally. Therefore,
tax law is often contradictory and even silly.

I know that all of this sounds like the ravings of a right wing
ideologue, but I am a liberal Democrat!!

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Dan Leeson, Los Altos, California
(leeson@-----.edu)
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