Misguided Attack by IRS on Hollywood

Hollywood consists of thousands of individuals who are usually unemployed but from time-to-time find short-term work on a production, “IRS Examiners About to Zoom In on Hollywood” (Oct. 20).

Annual incomes of these actors, painters, editors, Teamsters, camera operators, writers, hairdressers, carpenters, costumers, electricians, makeup artists, etc. are, at best, middle income.

Unlike “employees” in most industries, these workers are truly independent and entrepreneurial. They have no company-administered health plans or retirement programs. They have been hit hardest by the increase in Social Security taxes and, as independent contractors, they have to pay 50% more than an employee.

Their cost of making income is greater than (regular) employees in that they have travel costs to auditions, they may have ongoing training costs and the continuing costs of seeking new work.

If the IRS regulations (and the California State Employment Development Department) require that these individuals be treated the same as long-term employees, then those regulations are in error.

Many employers in Hollywood are very small businesses: Production firms with few permanent personnel, whose ranks may swell to more than 100 if they get a project financed; small sound, film, or video studios, which must maintain a low overhead, but may expand or contract based upon the flow of work; service businesses that may add or reduce staff based upon the weekly workload.

These small businesses try to comply with state and federal tax regulations, but that burden, coupled with audits, is overwhelming.

If it is the intent of state government to run these businesses out of California, they are succeeding. If the federal government is attempting to eliminate one of the last major exporting industries in the United States, this IRS effort should help.

DAVID J. LEEDY

Los Angeles