Your Social Security Number—Keep It To Yourself!

Payment for Consigned Merchandise Does Not Require a 1099-MISC!

Diane Burket

The Internal Revenue Service (IRS) does not require Consignees to give Consignors a 1099-MISC, so there’s no reason to give your art gallery, consignment shop, museum or retailer your Social Security number (SSN). Identity theft is one of the fastest growing crimes in the world. Keep your SSN number confidential, except when authorized by law.

My partner, Armand Cabrera, and I are in the art business. Armand is a fine artist that consigns his paintings to galleries across the United States. When the paintings sell, the art gallery writes a check to Armand for his portion of the proceeds. Occasionally, a gallery erroneously requests Armand to provide his SSN on a W-9 Form. We do not send it to the gallery because the IRS does not require it.

Armand consigns merchandise (artwork) to the gallery and they pay him for merchandise they sell. He is not considered an Independent Contractor, nor is the gallery paying him money for “services”. The gallery is paying him for merchandise. Merchandise is considered an “Exception” to the IRS. The IRS does not require galleries or consignment shops to report payment for consigned merchandise to artists or other consignors—although the payment is taxable to the consignor.

Let’s look at it like this…You purchase merchandise from Nordstrom, Safeway, Petco and Home Depot. At the end of the year, you don’t ask for their SSN (or Federal ID #) and issue a 1099-MISC! You’ve purchased merchandise—you haven’t employed them or hired them to perform a service.

Don’t take my word for it. You can view this information on the website on this page:

You will see the merchandise reference on the left side under “Exceptions”, 2nd bullet. The Internet is riddled with misinformation about this subject. Please—get your facts from the IRS official website—not from accountants and bookkeepers who make their living by preparing your taxes.

I don’t know why galleries and other consignees ask for this unnecessary information.Perhaps their CPA’s insist on it so they can make more money from their clients by creating needless paperwork. Maybe they’re just clueless. In any event, hang on to your SSN and only provide it when required by the IRS!

About the Author:

Diane Burket is an award-winning Voice Over Professional. She has been voicing scripts for over 20 years. She can be heard on National Commercials, Corporate Films, Training Videos, Telephone Prompts, Internet Sites and Multimedia recordings. In addition to her Voice Over, Diane also is the Agent for Armand Cabrera, a nationally-known oil painter represented by fine art galleries across the United States.

Art Gallery Territories

Armand Cabrera

Before you agree to be represented by a fine art gallery, many things need to be discussed with the gallery. One very important matter is the “territory” the gallery will control. Many galleries ask for an area of fifty miles from the gallery. In some large metropolitan markets, like San Francisco or Boston, a gallery may ask for a 100 mile radius. This makes sense because of the geographic spread of a large city. When the gallery runs local advertising, the reach of that advertising is usually within the “territory”. In some rural markets, galleries only ask for a few miles for their coverage. Knowing and abiding by the boundaries and limitations of your gallery’s representation will go a long way in creating a mutually beneficial relationship with your gallery.

Giving the gallery the “territory” means the gallery receives a cut of your sales in that area. It also means you will refrain from having private shows in that area, unless you have the gallery’s permission to do so. This prevents artists from participating in plein air shows, craft fairs, art and wine festivals, Open Studios, etc. in the territory, thus diluting the galleries ability to make money. I usually ask for the right to participate in two shows a year within the territory, although I rarely use that privilege.


The newest twist in requiring a territory for a gallery is the internet. Even though the internet has been around for years since Al Gore invented it, e-commerce has only finally trickled down to small businesses (galleries) in the last five years or so. Before that, no one expected a small business to have or maintain a web presence. Now most businesses require a website in order to stay competitive. Most people search for galleries using their computer or PDA and expect to be able to see art at any time of the day or night, no matter what time zone they reside.

I have heard of galleries demanding that their artists have no websites. In addition, some of these galleries require that if their artists insist on having a website, the site can only display examples of their work and not any artist contact information. This is an unreasonable demand. To allow a gallery to control your internet presence is giving the gallery the territory of the entire world! Unless a gallery will guarantee enough sales to support you and your family, there is no reason to agree to such unfair terms.

Most galleries tend to be regionally focused, selling only local scenes. I paint a much broader range of subject matter than any one gallery is willing to sell, so it makes sense that I post all of my work on my website, link to the gallery that has the paintings, or refer the customer to myself, if I have the work in my possession.

Why do some galleries insist on controlling their artists’ websites?Primarily because some artists are dishonest with their galleries. The artists are contacted by the potential buyer about a particular painting that is located at a gallery. Often the customer has seen the painting on the gallery website. The customer contacts the artist, hoping for a substantial discount by purchasing the piece from the artist. The artist undercuts a gallery by pulling paintings to sell directly to a client. Most galleries will discontinue representation of the artist if they discover the artist is being dishonest. Pulling paintings from a gallery to sell to a customer is the equivalent of stealing from the gallery.

I control my website. My partner, Diane Burket, maintains the Armand Cabrera website and we split the site into different categories, including:Artwork For Sale By The ArtistArtwork For Sale By My GalleriesWorkshops & Classes
My Contact Information

The artwork for the galleries has a link to the gallery showing the paintings and also the gallery contact information. If a client contacts us directly and asks about a painting consigned at a gallery, we direct them to the gallery. This is the only way to share an internet presence of your work. Through my website, I extend the galleries reach to new, potential Armand Cabrera art customers. Because of my press, standing in the art community and hard work, my website gets more traffic than most of my galleries’ websites. It would be foolish for my galleries to demand I take my site down or eliminate my contact information. I am an ethical, honest person. Removing my contact info or taking down my site would only hurt my gallery’s business.

So, please be honest with your galleries—but stand your ground. A website is a very important tool for an artist and for your galleries. Support your galleries by linking to their websites and being an honest artist.

A Proactive Approach to Gallery Representation

Armand Cabrera

I am always shocked at how lackadaisical most professional artists are when it comes to their representation in galleries. In these economic times, it is more important than ever to have a proactive, professional approach to representation.

Most galleries are as ineffectual as the artists they represent. As some of you know, I have an Agent, Diane Burket, who deals with a lot of my gallery issues. Please keep in mind, I pay for this service. If you find you can’t manage all the details, perhaps you should hire someone, too.

For this article, I will refer to “paintings”. However, these tips apply to any type of art you may create and wish to sell. Here are 3 things you can do to help your painting career and give yourself an edge in the marketplace.

1. Always Provide An Updated Consignment Sheet To Your Galleries
It doesn’t matter if the gallery provides a Consignment Form or you generate your own— never leave your artwork at a gallery without getting a signed Consignment Sheet proving what you have delivered to the gallery. The form should include 1) Name of Painting, 2) Size of Painting, 3) Retail Price, and 4) Amount Due To The Artist. I include an updated Consignment Sheet every time I send or drop off artwork at a gallery. With galleries going out of business at record rates, this little piece of paper might be the only thing that helps you retrieve your art from a failed gallery. Make sure you have two copies– one signed by you to leave with the gallery and one signed by the gallery for your records. If the gallery will not sign the form, don’t give them any work.
2. Keep A Photographic Record Of Your Work
Provide the gallery with digital images of your work for their website; don’t wait for them to shoot your paintings. You know what your paintings look like. You shouldn’t rely on your galleries to capture an accurate image of your painting after it has been varnished. I want my galleries contacting customers and selling paintings—not spending their day shooting images for artists too lazy (sorry) to do it themselves. My best selling galleries charge a fee to artists if they fail to provide professional quality images of their work. Don’t know how to shoot your paintings? Take a class, pay someone to do it or figure out how to do it yourself (like I did).

Keep a high resolution JPEG of all your paintings. If the gallery calls you about press opportunities, you’ll be prepared to provide them with the images they need in just minutes. I can’t tell you how many times I’ve been included in national and local press because I had a usable image ready to go. Other artists were ill-prepared and missed the opportunity.

3. Provide Your Galleries New Work
Make sure you maintain a schedule with your galleries to provide them with sellable paintings on a regular basis. One of the biggest complaints I hear from galleries is that artists dump a lot of old and inferior work on them. Why the galleries accept this substandard work is beyond me. But if you want to be represented and sell paintings, you have to provide good work for sale. I recommend swapping paintings out once a year—sooner if you are selling well or if your work is improving rapidly and there is a noticeable change in its quality.

Gallery Contracts


Armand Cabrera

When negotiating with a gallery, make sure you have a written contract. Honest people realize a contract protects both parties involved; if it is worth discussing it is worth putting in writing. Never assume anything about a business or people you don’t know. Not everyone will agree on what is fair and what is not.

Don’t let contracts put you off. While it is possible to have a successful partnership without a contract, by not having one you risk the loss of your inventory to unscrupulous people or unforeseen circumstances. Remember, you can agree to anything you like. A contract is just the written form of that agreement nothing more.

Contract items should include who pays for shipping artwork to and from the artist, framing, advertising and mailings. Negotiate what the commission percentage is for the gallery and how much they can discount, if at all. Set the retail price for your work. Make sure the gallery has a time limit on when they pay. A good gallery should pay immediately and no later than two weeks. Art work is consigned, it is your money and they have no right to hold it without your permission.

Decide with the gallery what their territory will be. Include the right to show in one or two group shows a year that might be in that area through a Museum or art organization. Paintings consigned to the gallery should always be hung in the showroom not stored in the back. State these things in writing.

A clause to dissolve the agreement between the two parties is also necessary. It should state clearly how much notice is needed to terminate the contract and how any unpaid money or debt is handled. Once you sign an agreement you are bound by the terms. This means not undercutting your sales and prices.Limit the terms of the contract to one or two years maximum. Some galleries have a hard time with an artist’s success as much as their lack of it and you will outgrow some of your galleries as your prices increase. It has been my experience that there are willing buyers for quality work at every price level. Don’t be afraid to move on if you feel the gallery is holding you back. My belief is the marketplace will let you know if you are doing the right thing.

Painting From Photos Part2: Copying and Copyrights

Armand Cabrera

In the second part of my discussion on the use of photos for the basis of your paintings I want to talk about copying other people’s photos and copyright in general. Let me make a distinction here so we have a basis for debate or agreement. I think using photo reference or copying paintings while you are learning your craft is fine as long as you never pass the work off as your own or try to sell them. There is no violation of copyright when it is personal use.

When you copy a work from another person you must sign it and add the phrase after (name of Artist being copied).

Using other people’s photos or art as the basis for your own and then selling it is where I have a problem and so does the United States Government. The law is very clear on this; it states

The U.S. Copyright statute, Title 17 of the United States Code, protects original works of authorship which includes original artworks. Section 106 of the Copyright Act reserves to the author, or creator, of a work, the exclusive right to reproduce the work in copies as well as to prepare derivative works. The definition of copy in the Copyright Act includes any “material objects… from which the work can be perceived, reproduced, or otherwise communicated…”.17 U.S.C. Section 101.The definition of derivative work includes “a work based on one or more preexisting works.”

Copying another artist’s work either as a copy or a derivative work under the Copyright Act, is stealing. The right to either copy or produce derivative works from an original artwork is solely and exclusively owned by the original creator of the artwork. This means you have no right to take someone else’s work either as a direct copy or as a derivative work and sell it, ever. There is no percent rule, there is no different media rule and it doesn’t matter if someone else you know does it. It is illegal.

I know wildlife photographers who now make a substantial portion of their income selling their photos to artists and suing artists for stealing their work off the net. If you want to paint wildlife you should be able to afford to go where the animals are and gather your own reference or pay for it.

Artist Jeff Koons was sued for his work ‘String of Puppies’ by photographer Art Rogers; Rogers claimed copyright violation of his photo ‘Puppies’. Rogers won.


The so called artist Shepard Fairey, is in a lawsuit right now over his use of an AP photo of Obama which Fairey made into a poster without permission.

Harlan Ellison the great American writer sued James Cameron on the Terminator movie for stealing from his teleplays for the Outer Limits television show from the sixties ‘Demon with a Glass Hand’ and ‘Soldier’. Harlan won.

A.E Van Vogt sued Ridley Scott and Fox for stealing his story of an alien, Ixtl from Voyage of the Space Beagle and making it into the movie Alien. A.E. Van Vogt settled out of court with Fox for an undisclosed sum.

It didn’t matter that the movies or the photo were a different media. It was a clear violation. This also applies to photos and sculpture being used as the basis for paintings by artists who were not the creator of the original work. If you want to paint, be honest about it and paint things you have actually experienced, take your own photos and do your own paintings; what could be more satisfying than that?