Thursday, August 14, 2008

RIAA tax returns online

For your viewing pleasure, and because I think these deserve scrutiny, I have made the RIAA's tax returns for the periods ended March 31, 2005, and 2006, available online.

Any experts in exempt organizations tax issues out there?

RIAA tax return period ending March 31, 2005
RIAA tax return period ending March 31, 2006

[PS. If you're curious to know how I got these, they were sent to me by Gloria G. Wolk, a consumer advocate and author who dug them up while researching a book she's working on about the trials and tribulations of pro se litigants. If you're a pro se litigant, and would like to talk to Gloria, email her here. -R.B.]

Commentary & discussion:

p2pnet.net




Keywords: digital copyright law online internet law legal download upload peer to peer p2p file sharing filesharing music movies indie independent label freeculture creative commons pop/rock artists riaa independent mp3 cd favorite songs intellectual property portable music player

12 comments:

Anonymous said...

The wonders of the FOIA.

XxX

Anonymous said...

Item G was particularly fascinating. Don't remember being asked that question on my personal return.

Ray, if they make you take these down they might (ahem) reappear on WikiLeaks.

XxX

Anonymous said...

Correct me if I am wrong - the ~$600,000 per annum from piracy recoveries must be the amount collected by the Settlement Center without a law suit? If an action was brought, it was brought by one or more of the record companies and they would receive the settlement, and hence it would not be part of these monies?

In any case, there has to be at least a Doe filing for any money collected by either route. Can someone reliably obtain information about how many does have been filed?

$600,000 doesn't seem like much. Maybe we are dealing with a paper tiger?

Kip Patterson

Anonymous said...

i-am-not-an-accountant sez:

Oh c'mon, you don't need to be an accountant to see some of the story lines in these tax returns.

In their year ending March 2006, they spent 3.6 million on "investigative operations," which has to be MediaSentry. They spent 1.4 million on consultants, part of which has to be their expert witness professor. Then they spent 1.8 million on "online enforcement," which has to be related to their anti-piracy activities. Their biggest expense is 17 million in legal fees.

Let's say that all of those items were necessary in order to get their take of $614,239 from the people they threatened to sue. That means they spent $39.50 for every dollar they extracted from lawsuits and threatened lawsuits.

That's great news for the lawyers, consultants, and MediaSentry-- a great stream of income for "producing" hardly anything.

Or *is* it such a great stream of income? It appears that the record companies that fund the RIAA may be wising up to the fact that suing your customers isn't the best way to stay in business. Receipts from dues fell from 52 to 45 million between the two tax returns. Maybe the record companies are beginning to see what they're getting for all those dues.

Alter_Fritz said...

unbelievable!

Nearly $1.5 million for a 40h/week "work" for this Mich Brainawol alone!

Now I know what devastates these well known and respected record companies and it is definetly NOT the casual filesharer and absolutely not the peopel that Ray and Co. defend!

Justin Olbrantz (Quantam) said...

Would those $17 million in legal fees even have anything to do with anti-piracy? The suits themselves are generally brought by the labels themselves, not the RIAA, so wouldn't those expenses not be on the RIAA's tax sheet to begin with?

derivative said...

Ray:

They are a 501(c)(6) organization. There are limits on what they can do for their constituents and maintain their tax-exempt status. If you know any tax lawyers, you might get them to look into this. The IRS loves nothing better than to recharacterize a non-profit as a for-profit and extract lots of back taxes and penalties for prior years.

A primer on this is here.

Igor said...

I wouldn't worry about them yanking this off Ray's site.

From my days at my college paper I remembered a site that listed other non-profits tax returns (including my University's).

Anyway, you can get these same documents at: GuideStar. Curiously there are no tax returns from prior to 2005. This site has been around since before then.

Interesting are the "self" descriptions there about the RIAA:

"Mission

WORKING FOR THE BENEFIT OF THE SOUND RECORDING INDUSTRY.
Programs

1. ANTI-PIRACY OPERATIONS: CONDUCT INVESTIGATIONS AND ENFORCEMENT RELATED TO THE ILLEGAL PRODUCTION AND DISTRIBUTION OF SOUND RECORDINGS.
2. BUSINESS AND LEGAL AFFAIRS: PROTECTS THE RIGHTS OF RECORD COMPANIES AND COPYRIGHT OWNERS, PROVIDES COUNSEL TO MEMBERS OF THE RECORDING INDUSTRY ASSOCIATION OF AMERICA AND LEADS ALL INDUSTRY STATUTORY LICENSES NEGOTIATIONS. THE DEPARTMENT ALSO INTEGRATES THE TECHNOLOGY OBJECTIVES AND GOALS OF THE RECORDING INDUSTRY THROUGH PROJECTS, ANALYSES AND STUDIES.
3. COMMUNICATIONS AND STRATEGIC ANALYSIS: PROVIDES INFORMATION ON THE ISSUE AFFECTING THE RECORDING INDUSTRY.
4. GOVERNMENT AND INDUSTRY RELATIONS: ENGAGES IN LEGISLATIVE, REGULATORY AND LEGAL ADVOCACY FOR THE RECORDING INDUSTRY."

Igor said...

Just as a follow up MPAA has their 2004 tax returns on their too.

Scott said...

Hi derivative,

Could you check the document link at the end of your post? It doesn't seem to be working from here. Thank you.

Usage May Vary said...

On statement #3: Anyone notice the 2mil reported as "IFPI government relations"? Apparently it didn't take much to bribe the IFPI, huh? I thought the IFPI and RIAA were supposed to be separate organizations?

Also, Federal Legislative Projects for 2mil? Sounds like small cash for RIAA to pay for lobbyists...money must be going somewhere.

Anonymous said...

I'm a retired CPA with moderate experience in non-for-profit tax issues.

The IRS makes Form 990 available for public inspection, so don't worry about being required to take these down.

A 501(c)(6) organization like this is responsible for pursuing the interests of its members. I see nothing here that seems to be a red flag indicating any tax code improprieties.

Now some highlights from the returns:

"Anti-piracy recoveries" (Form 990 p.8)
2006 $614,239 2005 $551,816

Legal fees (Form 990 P.2)
2006 $17,341,694 2005 $15,125,544

"Investigative operations"
2006 $3,569,390 2005 $3,155,671

"Online enforcements"
2006 $1,886,171 2005 $1,849,460

Is $600,000 or so per year the entire amount being recovered, or is some of it going directly to the record companies? If this is it, then the RIAA "sue-em-all" venture is a bottomless money pit.