The Internal Revenue Service, a never-ending source of material for this column, outdid itself last week for those of us amateurs who are fascinated by the Tax Code and how it can get you (or how you can get it). We'll begin with soap operas.
Several years ago, in 1969 to be exact, Congress decided that people might be encouraged to invest money if they were given a credit--a direct dollar-for-dollar reduction, not just a deduction--on their income tax. From that day forward, regulation writers, bill writers and the Tax Court have been striving to define which investments qualify for the credit.
The IRS proposed sharpening the definition even more last week on that old favorite of tax-shelter artists, films for movies and television. Congress has said that you cannot take a tax credit on films that are "primarily topical or otherwise transitory in nature." Thus, films that present entertainers or characters in a dramatization qualify for the credit, but news shows, game shows and variety shows do not.
Neither do soap operas, referred to in the rule as "serialized daytime television dramas." No matter how dramatic, they are essentially "transitory in nature," the IRS says; episodes, after all, are usually shown but once.