As the
U.S. Legal Advisor to the International Artist Managers’ Association (IAMA),
I’ve been asked to prepare an update on a variety of current issues involving
international touring at the next membership meeting in London on November 27,
2015. Not only do I adore IAMA, but as this would provide a lovely excuse for
my wife and I to avoid having to spend Thanksgiving with either of our
families, I was more than happy to agree. Having prepared the report, I thought
I would share it with all of you…
Visa Stercus
1. USCIS is presently taking a minimum
of 8 – 10 weeks to process visa petitions at both the Vermont and
California Service Centers. This means that, as of today, if you need to have
an artist enter the U.S. any earlier than March 2016, you need to pay the
additional $1225 for premium processing. (The official visa processing times
that USCIS posts on its website have always been purely propaganda and should
always be disregarded as such.)
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As a reminder, visa petitions can be
filed up to one year in advance of the performance date.
2. For those of you who have Canadian
musicians eligible for P-2 visas, we are receiving reports that Canadian AFM is
experiencing a backlog in preparing filing petitions. This is in addition to
the current USCIS processing time of 8 – 10 weeks.
3. I’ve said this before, but the message
not getting through, so its worth repeating. ARTISTS CANNOT DO ANYTHING IN
THE U.S. ON A TOURIST VISA OR ESTA (Visa waiver) STATUS!! Please stop listening to the colleges,
universities, and festivals that tell you otherwise. They have nothing to lose
other than perhaps having to find a replacement artist. On the other hand, I
have recently learned of two artists—one from Germany and the other from Spain—who
have had their ESTA status permanently revoked because they tried to enter the
U.S. in ESTA status to perform in the U.S. Both artists had entered multiple
times in the past and one were merely entering to “perform” a master class.
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It doesn’t matter whether an artist is
paid or unpaid, whether the concert is free, or whether the performance is for
educational purposes. They must have an appropriate visa—most often an O or P
visa. United States Immigration Officers are taking this very seriously.
4. In preparing visa petitions, please
start collecting and providing the evidence USCIS wants as opposed to giving
them what you have lying around in your press package. The days of being
able to supply a bio and a few press articles are long gone and we are seeing
more and more visa denials and delays because of this.
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I recently, and with much regret and
sadness, had to advise a client to re-cast a role because the artist’s European
management was simply refusing to cooperate in our efforts to obtain a visa for
the artist. (In case that manager is reading this…no, USCIS will not “just
google the artist to find out how famous he is!”)
Tax
Stercus
1. For those of you waiting to receive a
refund check from the Internal Revenue Service (IRS) for a non-U.S. artist who
has had 30% withheld from their gross engagements fees and are due a tax
refund, please be advised: the check is NOT in the mail, and won’t be for the
foreseeable future. The IRS has
added an extra layer of scrutiny to nonresident tax returns involving refunds.
Aside from the usual 2 to 3 month processing time, there is a second review to
be sure that everything on the 1042-S form is accurate and complete. If the IRS senses ANYTHING off, the taxpayer will
receive a letter asking for more info. To be fair, the IRS has
announced that it will be paying interest on all overdue refund checks. To be
practical, it doesn’t matter how much interest they offer to pay if, in fact,
they never issue the refund.
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Bottom Line:
There is currently a very good chance that if 30% is withheld from an artist’s
engagement fee, the artist will not get that money back…or, at least, not for
the foreseeable future. Please plan cash flow accordingly.
2. A Central Withholding Agreement (CWA)
is still the best way of avoiding or reducing the mandatory 30% withholding
required from all engagement fees for non-U.S. artists. To be eligible for a
CWA, among other requirements, an artist must have filed a U.S. tax return for
each prior year in which they have ever performed in the U.S.-- even where no
tax was owned. If an artist has not filed past U.S. tax returns, he or she will
be required to file them as a prerequisite to obtaining a CWA. Unfortunately,
we are seeing a sharp increase in the instances where filing such past tax
returns is triggering an IRS audit in which they are requesting documents and
records from the artist’s world-wide income.
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In this one particular area, the IRS
has displayed a remarkable degree of efficiency in identifying artists who have
simultaneously made the least amount of money and kept the least amount of
records to prove it.
3. Obtaining Social Security Numbers
(SSNs) and Individual Tax Payer Identification Numbers (ITINs) continue to be a
challenge. While SSSs are not any easier for an artist to obtain, they have not
become harder. ITINs, on the other hand, have become increasingly difficult, if
not impossible, to get. Despite
both staffing and budget cutbacks, the IRS has been requested to scrutinize
ITIN requests more closely—particularly with regard to proof of identity. For
most non-US residents, the most obvious and best proof of identity is a copy of
their passport. However, the IRS lacks the resources and training to evaluate
how to tell legitimate passports from forged ones. As a result, the IRS is now
only accepting copies of passports that have been certified by the actual
agency that issued the passport. However, even when this is provided, we are
seeing the IRS send notices requesting that the actual, physical passport be
sent to them instead. DO NOT DO THIS! You will never see that passport
again!
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There IS
one option for some Europeans: There are
IRS offices located in the U.S. Consulates in Paris and London. One can go to
these offices and request an ITIN in person (with an original passport, which
the IRS will review and return on the spot.)
HOWEVER – one can obtain an ITIN only if one has an “immediate
tax need”, such as filing a return. So, if requesting an ITIN in the Paris or
London Consulates, one must also bring a completed tax return in hand, ready to
file.
4. We are seeing a large number of U.S.
presenters--especially those based at colleges and universities—insisting that
non-U.S. artists are legally required to have either a SSN or ITIN in order to
perform or get paid in the U.S. Please be advised: There is no such law!
While such numbers may make book keeping and accounting easier for the
presenter, there is no law that requires an artist to have either one. Not only
are SSNs and ITINs not proof of work authorization, but as we addressed above,
many artists will be unable to get them in advance—if ever.
5. Canada requires 15% withholding for
gross engagement fees of non-Canadian performers performing there (similar to
the 30% withholding requirement in the U,S.) Canada Revenue allows performers
to file a waiver/reduction request to reduce/waive the withholding (an R-105
request). On their website, Canada Revenue indicates that the deadline for
filing such a request is 30 days prior to the first payment due. However, it's taking them MUCH longer to
process the requests. So, we are recommending that you file your request with
them AT LEAST 60 days prior, or earlier, if possible.
General
Travel Stercus
1. There is nothing new to report with
regard to the ban on bringing musical instruments into the U.S. that contain
ivory or other protected materials. United States Customs and Border Patrol
isn’t strictly enforcing this with any degree of regularity. However, if any orchestras are touring and don’t want
to take the risk, we are recommending that they contact Heather Noonan (hnoonan@americanorchestras.org) at the
League of American Orchestras (http://americanorchestras.org) who is among the leading and most effective
legislative arts advocates in the U.S. and is happy to talk to them about the
“Instrument Passport” process.
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The
League and others are continuing to lobby for specific amendments, including
exemptions to the rules for “personal effects” (which would include carry-on
musical instruments).
2. There has been some recent concern
about Amtrak, the U.S.’s ersatz rail service, implementing a new policy
requiring additional seats to be purchased for oversize musical instruments
which cannot fit into overhead compartments. To date, this policy has been
posted, but not enforced. We are recommending that artists and ensembles that
intend to use Amtrak to travel to engagements within the U.S. check with an
Amtrak representative in advance of the tour…and then be prepared for whatever
they are told in advance to then be either incorrect or disputed by Amtrak at
the actual time of travel.
Other
Stercus
1. When negotiating fees for U.S.
engagements, please remember to specify the currency in which the artist is to
be paid, including exactly how and when the exchange rate is to be calculated.
We are seeing an increased number of misunderstandings over this point.
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At the same time, use this as an
opportunity to clarify any other costs or deductions (such as taxes, visas
costs, hotel, travel, etc.) which either are or are not to be included as part
of the engagement fee.
2. Too many people are still relying on
general, vague, boilerplate, or unspecific contractual language to take the
place of actual negotiation. Do not rely on the misguided belief that there are
standard legal terms and procedures that magically govern engagements and
bookings when words fail. If you want something, or don’t want something, say something—or,
preferably, write it down.
3. When dealing with performances of new
works or contemporary music, bear in mind that licensing laws differ. What’s in
the public domain in Europe may not be in the United States. Even a
re-arrangement or re-orchestration may not be permissible in certain
countries.