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.

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?

Copyrights part 2

by Armand Cabrera

One of my readers wrote for some further information and clarifications about copyrights and I thought they would be of interest to everyone so here they are.

If an artist copies a work and clearly ‘attributes’ it to the other artist, is it then okay to sell it as a copy? Only if the artist is dead?

 John Singer Sargent

If you copy the work of a dead artist (as an example let’s say Sargent) you must use the phrase After John Singer Sargent and then your name, as part of the signature on the front of the painting. To copy the work of a living artist and sell it you must obtain their permission. Museums have strict standards for copy work so if you are planning to copy paintings in a museum check their rules and registration policies. Usually museums don’t want you to copy a painting in the same size as the original.

It seems common now for artists to sell prints of their paintings. What about artists who put their own images on t-shirts, calendars, coffee mugs etc? (With a copyright symbol) Are there any ethics or laws here, especially regarding the person who bought the original painting? Maybe even several years earlier before all these merchandising opportunities were available? Do clients object to “their “painting being on a coffee mug? Or does it make their painting more valuable?

Clients may object but the copyright resides with the artist until they give up or transfer those rights in writing. The sale of the original work transfers no copyright for the work and the creator of the work can recreate and sell any reproductions they choose. Whether it makes the original more valuable is debatable.

It is also important to take into consideration the effect selling prints has; if your collectors start dumping your originals back on the market you might want to think twice about selling reproductions. You have to sell a lot of tee shirts and mugs to equal the money you would make from the sale of just one original painting.

Protecting Copyright

By Armand Cabrera

An artist’s work is more than just the image they create whether it is digitally or traditionally made. It is also the rights to use that image for print, publication, advertising.  Artists need to be aware of copyright and how valuable it can be to them as an income stream in addition to the making of art.
Every artist I know has at least one image they have created that they could have sold 100 times if it was still available. By keeping good digital files of all your images you can create an image bank that you can then license out for money long after the original has been sold.
Passive income streams are not just for digital artists. Traditional artists can and should do the same with their work. Just make sure when you enter into agreements with people for gallery representation or commissions you retain the rights to your image.  I have licensed my images for use as decoration in hotel rooms, books, magazines, corporate brochures, movies and television shows. In some cases the compensation was equal to the price of the original painting.
I have recently heard of problems with people thinking they could license images without the artist’s permission just because they sell the artists originals in a gallery or act as the artist agent in other capacities.  This is not the case and US copyright is very clear on who owns the rights to an image. All rights are retained by the image creator unless they specifically give up those rights in writing. Here is a link to the government website followed by the actual clause.
202: Ownership of a copyright, or of any of the exclusive rights under a copyright, is distinct from ownership of any material object in which the work is embodied. Transfer of ownership of any material object, including the copy in which the work is first fixed, does not of itself convey any rights in the copyrighted work embodied in the object; nor, in the absence of an agreement, does transfer of ownership of a copyright or of any exclusive rights under a copyright convey property rights in any material object.
With the slowed economy galleries and other artist venues are taking advantage of artists by not compensating them for the use of their images. Artists are being stupid not insisting on payment for the use of their image in any for-profit display. Artists need to insist on payment for use of their work and to not do so is hurting the environment for professional artists.

The Business of Fraud

Armand Cabrera
Fraud is big business. Companies in other countries steal American intellectual property, counterfeit goods and violate copyrights all the time and this costs Americans and American companies 500 to 700 billion dollars a year in lost revenue. Counterfeiting and piracy are a growing problem that translates to almost a million American jobs lost each year. People think that stealing content doesn’t affect them directly but it does.
It’s not just Asian countries like China that are stealing from the USA there are US companies and businesses that are complicit in the theft of copyrighted material.  They profit either by reselling pirated or forged materials or they are hosting internet sites for the sale of these violators. Galleries and art brokers buy this stuff wholesale and then resell it. If you are an artist in a gallery and you have seen or know about this going on in the gallery then you are as much a part of the problem as the people doing it directly. As Edmond Burk said “the only thing necessary for the triumph of evil is for good men to do nothing.”
Watch this video about an aspen gallery allegedly using Chinese made copies of known artists works to sell to unsuspecting buyers whose only concern is a cheaper price than the original.
Places like the city of Dafen in China copy thousands of works of art a year selling them at a penny on the dollar to unscrupulous galleries in the USA.
 Look at this company selling large paintings by known artists that would normally sell in the tens of thousands of dollars for less than 100 dollars.

Artists need to contact their representatives in government and tell them that these kinds of business dealing must be stopped. We must hold the American companies that are complicit in these thefts liable and shut them down and expose them for the criminals they are.