Amicus Brief Filed in Support of Lee Storey/Doc Filmmakers

In a US Tax Court trial held in Arizona on March 9, Judge Diane Kroupa made a statement that, if memorialized in a ruling, will have a devastating impact on independent documentary filmmakers across the US. Judge Kroupa questioned whether a documentary could be “for profit,” since by its nature it is designed “to educate and expose,” and she invited the parties to present case law on the issue.

Judge Kroupa’s speculation came in a case in which the IRS argued that filmmaker Lee Storey could not deduct business expenses pertaining to her film Smile ’Til It Hurts: The Up with People Story because the primary purpose of her film (and by inference all documentary films) is to educate and expose, not to make profit, and that therefore documentary filmmaking is a not-for-profit activity. The IRS believes that if the person has no intent to make a profit, then the activity is a "hobby." Therefore, they claim that Storey owes hundreds of thousands of dollars in back taxes and penalties for the business deductions she took.

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 support Storey, IDA has filed an amicus brief in the case, urging the US Tax Court to recognize that the production of a documentary film is, at its core, a “for profit” business such that business expenses are deductible for tax purposes.

By doing so we hope to ensure that all filmmakers receive the respect they deserve, and that the many sacrifices they make in the pursuit of their art and livelihood will not be made in vain.

Michael Lumpkin
Executive Director
International Documentary Association