A Visit from the IRS

In the early 1980s, I converted our third floor into my office. I had a small life insurance brokerage business with one or maybe two secretaries. I was reluctant to do so, thinking it was unprofessional to conduct affairs in that fashion, but was persuaded by my accountant to do so, not only to save the rent that would have been required elsewhere, but to deduct from our personal income tax depreciation on a portion of our home and various other expenses. Furthermore, my clients were in hospitals in other cities so that none would be visiting my office, and neither my secretaries nor I would have to contend with downtown traffic and parking inconveniences.

But it might have caught the attention of the Internal Revenue Service, one of whose representatives paid me a visit to review my books. The following is part of the conversation we had on a given day.

IRS: What is the deduction for Cutler’s?

WHHR: For records.

IRS: Records? What kind of records?

WHHR: Records for this turntable, here next to my desk.

IRS: Music records?

WHHR: Yes.

IRS: Strike that deduction. Records are not deductible.

WHHR: But they are a business expense. The records are played here, in my office, only during business hours.

IRS: The cost of music records is not deductible.

WHHR: But I have no record player downstairs, in my living quarters. There records are not for personal use.

IRS: The cost of music records is not deductible.

WHHR: But the cost of music is deductible in stores and in elevators. Where ever you go there is music. Go to any drug store or department store. How about Muzak in a dentist’s office? That’s deductible, even though it isn’t any good.

IRS: The cost of music records is not deductible.

WHHR: Now, look! I am in a very competitive business. There are hundreds of guys selling what I sell. I need to do something different, something that makes me stand out. Take Bach, for example. When Christ speaks in the “St. Matthew Passion”, Bach has a solo violin playing, as though to give Him a musical halo. That’s what I do. When someone calls me on the phone, I turn down the volume down a bit so that my voice has the same musical halo. That makes me different. That gives me an edge. That gives prospects a reason to do business with me and not with some other Tom, Dick, or Harry.

IRS: The cost of music records is not deductible.

WHHR: No. You don’t understand. You know about the Black Watch, the English bag pipers that lead the troops into battle. The Germans called them the Black Watch of Hell. They were meant to bring terror to the enemy. Not that I think that prospects are the enemy. But I want to discombobulate them, to soften them up, so to speak, so that they will follow my advice. Did you see that movie, “Apocalypse Now”, that scene when the helicopters came in and the commander was playing Wagner, the conclusion of “Die Walkure”, I think? What’s that all about? It’s to shake them out of their certitude. That’s what I want to do. Disorient them so that they will listen to me, so I can get them to take action. When I call a prospect on the phone, I have to get his or her attention in a few seconds. I have to do something to rattle their teeth. I want to get them to listen to me, and Wagner helps me to do that. It’s meant to serve a business purpose.

IRS: The cost of music records is not deductible.

When I moved to New Haven, I shared an apartment with a classmate who not only had the second highest grade in the class but who went on to do very well at the Yale Law School. At the time he was a clerk for Judge Charles Clark, a judge on the prestigious Second Circuit Court of Appeals. He told me once that he thought I would have made a great trial lawyer. Had he witnessed my performance that day, he might have changed his mind.

WHH Rees, February 6, 2007