By: Robert J. Sciglimpaglia, Jr., Esq. (SAVOA No. 07035)
 
            Due to the growing popularity of the home studio, the Voice-Over Industry is quickly becoming a legitimate and extremely fun way to generate income from one's home.  The growth of the home studio has also allowed a diverse cross section of the population to get involved with the fun.  In this writer’s experience, many people are now entering this field in retirement, or as a second career.

However, fun aside, just like any other home-based business, the “business” side must not be ignored or some serious tax and legal consequences can result.  This is especially true for those taking voice-over up as a  “second career” who may have built up some assets during their prior career.

Like many other businesses, the voice over industry has it’s own set of legal and business issues, which this article will examine.   Of course, this article is not meant to be an all-inclusive discussion of every legal and business issue associated with the voice-over industry, rather, it merely scratches the surface, and some of the issues discussed herein are common to any business regardless of the industry.[1]

I)  To Incorporate or Not
            The question about whether or not to incorporate has been subject to much debate in the voice over community.  It is this writer’s firm belief however, that there should be no debate about it whatsoever.  The question should not be whether to incorporate, but it rather should be how best to incorporate.
           
            Just like engaging in any type of business venture, a decision needs to be made about what “form” the business will operate.  Will it be a sole proprietorship[2]; a Limited Liability

1.  The author, Robert J. Sciglimpaglia, Jr., writes this article for general informational purposes only, and this article should not be construed as specific legal or accounting advice, and is not intended to form a specific attorney-client relationship, nor is it intended to provide specific advice for every jurisdiction.  The author does not intend this article to be a substitute for a specific consultation with a qualified professional in the reader’s area concerning the reader’s specific facts and circumstances.  Any opinions stated herein are solely the author’s own. 2.  The Internal Revenue Service defines a sole proprietor as “someone who owns an unincorporated business by himself or herself.”

Company (LLC)[3]; a C Corporation[4]; or an S Corporation[5]  Normally, voice-over artists don’t even consider their business formation and commence operating as what this writer terms “a sole proprietorship by default” as they just jump into the business, willy nilly, without a plan.  They will start sending out their wonderful professionally produced demos as soon as they receive them, set up their websites, myspace pages, sign up for one of the many audition sites on line[6] and commence auditions, etc, without even giving a second thought as to how their business is structured.  This may be because some people getting into voice-overs treat it as more of a hobby rather than a business.

            The logic is “until I start to earn some money at this, what’s the point.”  However, this same logic doesn’t prevent many of those same voice-over artists from doing business under a “trade” or “stage” name, like “ABC TERRIFIC VOICE”, or some other catchy phrase.  This is what is referred to in the legal world as a “DBA” or “Doing Business As.”   Nor does the logic prevent voice talent from spending thousands of dollars on home studio equipment, training, production of their demos and marketing efforts.  All expenses that the talent believes will pose no problem deducting from their income taxes.

            Even after many voice-over  artists do start to earn income in the business, they still don’t get around to setting up a more formal structure and they only think about such things around tax time, or if they are ever subject to a legal action. 

3.  The Internal Revenue Service defines a Limited Liability Company as “a relatively new business structure allowed by state statute.  LLCs are popular because, similar to a corporation, owners have limited personal liability for the debts and actions of the LLC.” 4.  The Internal Revenue Service describes a corporation as follows:  “In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation’s capital stock.  A corporation generally takes the same deductions as a sole proprietorship to figure its taxable income.  A corporation can also take special deductions.  For federal income tax purposes, a C corporation is recognized as a separate taxpaying entity.  A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders.   The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends.  This creates a double tax. The corporation does not get a tax deduction when it distributes dividends to shareholders.  Shareholders cannot deduct any loss of the corporation.” 5.  The Internal Revenue Service describes the advantages of an S corporation as follows:  “An eligible domestic corporation can avoid double taxation (once to the shareholders and again to the corporation) by electing to be treated as an S corporation.  Generally, an S corporation is exempt from federal income tax other than tax on certain capital gains and passive income.  On their tax returns, the S corporation’s shareholders include their share of the corporation’s separately stated items of income, deductions, loss and credit, and their share of nonseparately stated income or loss.” 6.  For example, Voice123.com or Voices.com

            In this writer’s opinion, the cost of setting up a formal entity, like an LLC or Corporation,  far outweighs the potential cost involved in defending a lawsuit or action by the IRS (see below), and in some cases, will also save the voice-over artist at tax time depending on the revenues generated from the voice-over business.   In fact, an LLC is extremely simple to set up in almost all States and, unless a voice over artist has employees working for the LLC, it doesn’t even require a separate Employer Identification Number (EIN) like a corporation would need.[7] 

            Further, the IRS makes a very serious distinction between a “hobby” and a “business”.  If the IRS determines that someone is pursuing voice-overs as a hobby, then it will disallow any deductions for any voice-over related expenses, like production costs of the demo, home studio costs, the VOICE 2008 conference, etc.  The number one factor that the IRS says you should ask yourself concerning whether an activity is considered a hobby or a business is “Do you run the activity in a businesslike manner?”[8]  In this writer’s opinion, operating your voice-over business as an LLC or Corporation certainly would go a long way in convincing the IRS that your voice-over activity is a bona fide business rather than just a hobby.[9]

            One of the many other advantages of setting up an LLC applying specifically to voice talent is that, in most States, it eliminates the need to file a “Trade Name Certificate” or “Fictitious Name Certificate” to use the fancy “DBA” name as mentioned above.  Most States require

7. For more information on the difference between Corporations and LLC’s and whether a Voice Over artist should form an entity please see:  Should You Incorporate? Yes! Urges A VO/Attorney. Here’s Why and How, By: Robert J. Sciglimpaglia, Jr. on www.voiceoverxtra.com. 8. See IRS Summertime Tax Tip 2007-13 entitled Business or Hobby? Answer Has Tax Implications which is available at www.irs.gov.  The factors that the IRS says you should weigh to decide if your voice over activities are a business or hobby are: Do you run the activity in a businesslike manner? Does the time and effort you put into the activity indicate an intention to make a profit? Do you depend on income from the activity? If there are losses, are they due to circumstances beyond your control or did they occur in the start-up phase of the business? Have you changed methods of operation to improve profitability? Do you or your advisors have the knowledge needed to carry on the activity as a successful business? Have you made a profit in similar activities in the past? Does the activity make a profit in some years? Can you expect to make a profit in the future from the appreciation of assets used in the activity?   9. For an excellent discussion about some of the issues in transforming a hobby into a business see the article:  Turning a Hobby into a Lucrative Venture in the June, 2008 edition of Money magazine.

individuals that are operating under a name other than their proper legal name as a sole proprietor to file a form with a designated governmental entity.[10]  This includes fancy names like “ABC Terrific Voice” or, a “stage name”, i.e., where the voice over artist or actor uses a name other than their legal name.  

            Filing an LLC eliminates this requirement in most jurisdictions because the LLC paperwork is filed with the Secretary of State and is deemed to be notice of a “trade name” in that State.  This would equally apply to doing business as either an S or C corporation.  The failure of a sole proprietor to file such a “trade name” certificate can result in punitive damages, and can even result in criminal proceedings in some jurisdictions.[11] 

            In short, some form of corporate structure should be the first step in protecting a voice- over artist’s personal assets in the unfortunate event that they are sued, and eliminates the problems mentioned above concerning operation as a “DBA.”

II)  Potential Liability Issues Specific to the Voice Over Industry
            As a voice over artist I agree in theory with the statement I often hear from other voice over artists that “this is a liability-free industry.”  As an attorney, however, I know better than that!  The sad fact in the United States these days is that whenever money changes hands or an injury occurs[12] the potential for a lawsuit exists.

   A)    Celebrity Impersonating
          One area of the industry that voice over artists should be cognizant of is celebrity impersonating.  Celebrity impersonating falls under the auspices of the area of law known as

10.  This could be a Town, City or County Clerk, or the Secretary of State’s office, or the Office of Taxation, etc.  Check with a local attorney in your area to determine the proper name of the “Trade Name Certificate” and the location for filing of same. 11.  The intent behind this requirement to file a “trade name certificate” is to prevent people from committing fraud while doing business under an alias, thus making it harder to be tracked down.  Sensitivity to this legal requirement has been heightened recently, particularly in this era of identity theft. Although this writer would recommend operating under a corporation rather than an LLC to gain maximum legal protection, either of these entities is much preferable to operating as a sole proprietor. For more information on the advantages/disadvantages between Corporations and LLC’s please see:  Should You Incorporate? Yes! Urges A VO/Attorney. Here’s Why and How, By: Robert J. Sciglimpaglia, Jr. on www.voiceoverxtra.com. 12.  “Injury” can be physical, but it can also be an injury caused by infringement of some tangible or intangible intellectual property right, that is often encountered in the voice over industry.

“right of publicity” laws.  The right of publicity is the right of an individual[13] to commercially exploit their name, voice, signature, photograph or likeness.  A handful of States have specific laws concerning the “right of publicity” and some other States that do not have a statute follow the common law rules concerning the right of publicity.[14] 

            “Right of Publicity” laws would allow a celebrity to sue a voice talent who impersonates their voice for commercial purposes.[15]  Nevada’s statute, however, specifically exempts impersonators from liability for infringement of a celebrity’s right of publicity.[16]
 
            Such an exemption does not exist in other State’s statutes, however, so a voice over artist must always be alert when asked to impersonate a celebrity as to how the impersonation will be used.  In general, the First Amendment allows certain uses of impersonations, but generally not when those impersonations are meant to generate profits.  Such profit making use most certainly can expose both the voice talent, and the producer of the spot to a lawsuit. 

            This goes for impersonating celebrities who are either alive or deceased, as many Statutes provide a protection to the celebrity for some years after they have died.  For instance, in Nevada, the celebrity is protected for fifty (50) years after death[17], where in Indiana the protection remains for one hundred (100) years.[18]  For deceased celebrities, their heirs will be the ones deciding who is able to use their loved one’s likeness and who cannot. 

B)     Product Endorsements
     Another potential snake pit for the voice-over artist is in the area of product endorsements.

13. The “right of publicity” usually involves impersonating celebrities, but the majority rule in most jurisdictions extends the “right of publicity” to non-celebrities as well, meaning anyone whose name, likeness or voice is used or impersonated can bring a lawsuit.  The “right of publicity” has NOT yet been extended to animated characters, however.  See, J.T. McCarthy, The Rights of Publicity and Privacy, §4.3 (1989). 14. By no means is the “right of publicity” internationally recognized at this time and this area of law is ever emerging.  Another emerging area of law relating to the “right of publicity” is “celebrity licensing” which has to do with the right of a celebrity to “license” the use of his likeness, similar to licensing the use of a copyright.    15. See the famous impersonator cases on this issue; Midler v. Ford Motor Co., 849 F.2d 460 (9TH Cir. 1989); Waits v. Frito-Lay, Inc., 978 F.2d 1093 (9th Cir. 1992); White vs. Samsung Electronics America, Inc., 971 F.2d 1395 (9th Cir. 1992). 16. See Nev. Rev. Statutes, NRS §597.790, et seq. 17. Nev Rev. Stat. §597.790 (1). 18. Ind. Code Ann. §§32-13-1 et seq.

Product Liability laws in the United States are generally designed to protect the consumer from dangerous or defective products.  These laws are usually couched in terms of “strict liability” rather than “ordinary negligence”.   This means that anyone involved with the manufacture, sale, or distribution of a product that causes an injury to the end user can not only be sued by the injured party, but will also be held strictly liable without the need for the injured party to prove that the defendants did anything negligent.  The simple fact that the product was put into commerce and caused an injury, in many jurisdictions, is enough for the injured party to recover. 

            In addition, there are a variety of consumer protection laws, unfair trade practice statutes and Federal Trade Commission (FTC) regulations and guidelines designed to protect consumers from being ripped off by false and misleading advertisements. 

            This raises an interesting question concerning whether a voice-over artist is hired to record a commercial that says something like:  “This drug is THE best out there for the prevention and cure of this disease, and I personally guarantee it will work for you” and the drug ends up killing the user, whether the voice-over artist could be held liable for that “guarantee.” 

If the voice over artist were a celebrity, then they certainly could be sued under a number of theories, including product liability, but also consumer protection statutes, and Federal Trade Commission (FTC) guidelines against false and misleading advertising.[19]  One is reminded of the series of lawsuits against Robin Leach back in 1999 where at least a dozen Attorney’s General across the country sued him for endorsing vacation packages in both television and radio ads that turned out to be bogus.

Although one must wonder if such lawsuits would be brought against non-celebrity voice talent that are not so “high profile”, one of the functions of an Attorney General is to discover collectable assets that could be attached to pay back “victims” of false and misleading ads, or to pay back “victims” of dangerous products, so the possibility certainly exists that such a lawsuit could be brought against a voice-over artist that has some assets.

C)      Libel and Slander and Interfering with a Business Relationship

19. The FTC requires pitchmen to base their endorsements on honest beliefs based on either personal experience or independent investigation of the endorsed product or service.

            Although I like to believe our business is filled with nice and great people that are never dishonest (and in my experience, for the most part this is true), as more voice over artists enter the fold, the competition is bound to increase, and thus, dishonest individuals are bound to sneak in;  individuals who will do anything to build their business, including stealing clients and bad mouthing other talent.

            I have witnessed this type of behavior in the legal business in certain areas over the years as more and more attorneys have entered the market.  From what I have seen, it tends to happen in large areas where the likelihood of doing business with that particular attorney again is slight.  In smaller areas where attorneys have to deal with each other repeatedly, this rarely happens. 

            I do believe, however, the potential for dishonesty exists as the voice over field grows and the geographical area of the field expands, and I can see the potential for voice over artists “bad mouthing” other talent, who they may never meet, to a producer or client with words like: “that guy/gal is a terrible voice over artist” or “that guy’s nickname is Multi-Take Mike.”  With the amount of sensitivity and insecurity in this business on the part of advertising agents, etc, it is certainly foreseeable that statements like these could cause someone to “jump ship” and switch to another voice talent.  

            I truly wish that this never happens in this field, but if it does, this could give rise to defamation lawsuits for libel and slander[20] or lawsuits due to the tortuous interference of a business or contractual relationship.[21] 

20. The definition of Defamation and the difference between libel and slander is defined as follows from Wikipedia.com:  “In law, defamation (also called vilification, slander, and libel) is the communication of a statement that makes a false claim, expressively stated or implied to be factual, that may harm the reputation of an individual, business, product, group, government or nation. Slander refers to spoken comments, while libel refers to any other form of communication such as written words or images. Most jurisdictions allow legal actions, civil and/or criminal, to deter various kinds of defamation and retaliate against groundless criticism. Related to defamation is public disclosure of private facts which arises where one person reveals information which is not of public concern, and the release of which would offend a reasonable person.” 21. Wikipedia.com defines the tortuous interference with a business or contractual relationship as follows:  “Tortious interference, in the common law of tort, occurs when a person intentionally damages the plaintiff's contractual or other business relationships. This tort is broadly divided into two categories, one specific to contractual relationships (irrespective of whether they involve business), and the other specific to business relationships or activities (irrespective of whether they involve a contract).

III)  Contractual Issues and Considerations Relating to the Voice-Over Industry

            The voice-over industry is a contractual based business.  For those talent that are in the Union, the Union has gone through painstaking processes to ensure that voice talent are protected in the contracts they sign with producers, and that they are fairly compensated for the work they do.  On the other hand, the unrepresented non-union or financial core talent are on their own when it comes to negotiating their fees and protecting their interests contractually for non union jobs.  
           
            All agreements as to what is to be recorded and delivered and the cost of same should be in writing, and equally as important, the usage of the spot being recorded should be CLEARLY spelled out.  It would be a great idea for a talent to have a standard contract that he/she gets signed for every job, like an attorney has a standard retainer agreement that gets signed at the commencement of each case.  Keep in mind that it has been said that the true purpose of a contract is “to keep an honest man honest.” 

            However, due to the often fast-paced nature of the voice over business, written contracts are not always practical.  If that is the case, then, at a minimum, emails should be exchanged between the client and talent indicating the price, usage and delivery requirements for the final sound files.

            It can be as easy as the talent writing a simple email like:  “I will FTP the final .wav files to you for this 30 second TV spot by X date, which you can air for a year in the State of X, and you shall pay me the amount of X dollars.  Please reply to confirm.”  Once you get that reply, you have a binding, written contract that is enforceable in a Court of law. 

Tortious interference with contract rights can occur where the tortfeasor convinces a party to breach the contract against the plaintiff, or where the tortfeasor disrupts the ability of one party to perform his obligations under the contract, thereby preventing the plaintiff from receiving the performance promised. Tortious interference with business relationships occurs where the tortfeasor acts to prevent the plaintiff from successfully establishing or maintaining business relationships. The tort was first described in the case of Keeble v. Hickeringill, (1707) 103 Eng. Rep. 1127, styled as a "trespass on the case". In that case, the defendant had used a shotgun to drive ducks away from a pond that the plaintiff had built for the purpose of capturing ducks. Although the ducks had not yet been captured, the Justice Holt wrote for the court that "where a violent or malicious act is done to a man's occupation, profession, or way of getting a livelihood, there an action lies in all cases." The court noted that the defendant would have the right to draw away ducks to a pond of his own, raising as a comparison a 1410 case in which the court deemed that no cause of action would lie where a schoolmaster opened a new school that drew students away from an old school.”

            Of course, for larger jobs where you are being hired as a “voice” of a company where you will be doing repeated work, a more detailed contract should be signed between the parties prior or simultaneously to work being done.

            First, if a contractual term is greater than one (1) year, it MUST be in writing to be enforceable under every States’ Statute of Frauds.  Second, not only should the contract lay out all the above basic information, but it should also have a provision in there that allows the talent to terminate the arrangement after a certain period of time should things not work out, and it should cover situations such as the sickness or death of the talent.

            The reason for this is to prevent the talent from adverse consequences at the hands of the company who has likely hired the talent to associate his or her voice as “branding” of its product or service.  As you can see, if a talent just quits once the client has invested a substantial sum of money into such branding associated with the talent’s voice, it could potentially be devastating for the client.

            A talent’s standard contract should also have a clause in it so that the talent can get a copy of the finished spot.  The contract should also have a clause that allows the talent to use the finished spot on the talent’s demo or website, and if a standard contract is not signed, the talent should again, at a minimum, use email to get specific permission from the client to use that finished spot for marketing purposes.

            Although it is customary for a talent to use the final spot for marketing purposes, a talent should never assume it is OK to use the spot without getting the client’s permission as the client may not agree, and such would be actionable against the talent as a violation of Copyright law.
Another very important point concerning contracts is that, now that the voice-over industry is a global business, even if you have an enforceable written contract, it may not be worth the paper it is written on due to jurisdictional issues.  For instance, if you as the talent are in New York, and the client is in California, and you record in New York while the client never steps foot out of California, the New York Courts would have no jurisdiction over the dispute because the individual you are suing resides in California.

            Thus, you would have to take a trip out to California, or hire local counsel there in order to collect your money; hardly worth it for the average non-union voice over job.  As such, it is extremely important to get at least part of the payment sent to you upfront by either PayPal™ or by credit card.  If a talent is doing work from around the country, signing up to accept credit card payments will be well worth the expense. [22]

IV)  Intellectual Property Issues:  Copyrights and Trademarks

           a)  Infringement of Copyrights
           
            Voice-over artists have to consider both sides of Intellectual Property issues, meaning, they have to be concerned with infringing on others copyrights or trademarks, and they also need to protect their own ideas and creations through copyrighting and/or trademarks.   The most common area where voice over talent can run into copyright infringement issues is through their demos.

            It is very important that the music used on the demo is properly licensed and NOT copyrighted. In addition, it is very important for the talent to have proper permission from the producer of a spot to use the spot on their demos.  The voice talent does not automatically have the right to use a spot on their demo as that spot has been copyrighted by someone other than the voice talent, unless of course, the voice talent also produced the spot, then they may have copyrighted it.[23]

            In addition, there is a popular misconception in the voice over business that once a commercial airs, the copy is free to poach and use on demos.  This is NOT the case as that copy was probably copyrighted by the advertising agent or author of that copy.  It has become a custom in the industry, however, that once a spot airs, the copy is fair game, and, truthfully, this author has not heard of any cases where a lawsuit has resulted from the use of this type of copy on a demo.

22. In fact, you can set up a credit card acceptance account through Intuit’s™ QuickBooks/Quicken™  software, relatively inexpensively.  These programs will also allow you to easily keep records for your voice over business for IRS purposes as well. 23. For more information on Copyright issues and demos see, Copyrights:  Will Your Demo Get You Sued?, By: Robert J. Sciglimpaglia, Jr., on voiceoverxtra.com.

  
            This author is quite certain, however, that if a voice over artist uses copy on their demo that was written by an advertising agent (or someone else) for an ad campaign that has not yet aired, then a lawsuit for copyright infringement would result.[24]  One can understand how a company who has presumably spent thousands of dollars on an advertising campaign would not appreciate a voice talent using copy that has not yet been presented to the public.  On the other hand, you could also see how a company would not mind a little extra and free publicity by distribution of the spot that has already aired on a voice-over artist’s demo.  That may explain the reason why lawsuits do not usually result from using copy on one’s demo from material that has already aired.
 
            Nevertheless, the possibility of being sued under these circumstances is something that a voice over artist needs to be cognizant of, and, of course, obtaining permission for using the material will prevent any possible legal ramification.

            It also goes without saying that for voice over talent that also offer production services for clients, neither copy written for another company and modified, nor unlicensed music, should be used or that just invites litigation.

            b)       Protection of your work through Copyrights
Voice-talent also need to understand how to protect their creative works through Copyrights.[25]  Voice-talent are most certainly hired to do most voice over jobs as a “work for hire”, meaning that whoever hires the voice talent is retaining the right to copyright the finished product with the talents voice on it.  This is normal and customary in the business.

            However, if a voice talent produces commercials, creates music for commercials, or drafts copy for commercials, that voice talent should do whatever is necessary to retain rights to that spot, meaning, they should specifically state in their contract that their services will not be considered a “work for hire” and that the talent has the right to copyright the spot.  But just because it hasn’t happened yet, it doesn’t mean it won’t happen in the future.

24.  In fact, Voice123.com posts a warning on their audition pages that states:  “Please note that you should only use the script or your recording of it for auditioning purposes. The script is property, unless otherwise specified, of the voice seeker and it is protected by international copyright laws.” 25.  For more information about how to file a copyright application and penalties for infringement, etc. see:  Copyrights: Reel ‘Em In to Your Demos, By Robert J. Sciglimpaglia, Jr. on voiceoverxtra.com

            Copyrighting is a very powerful protection as it prevents others from infringing on the work for the entire life of that author, plus ninety (90) years after the authors death.  Civil Penalties can be as high as $150,000.00 for the willful infringement of a copyrighted work.  This provision is probably not going to apply to most commercial spots that are produced as the practical life expectancy of the spot is limited.  The provision, however, will prevent another company from stealing the spot, and also allows your heirs to continue to protect your work for you after you have passed away so it can continue to generate income after the author’s death.

            c)       Trademarks and Service Marks

Voice-over artists also need to be aware of trademark law to protect their business names under which they operate.[26]  Once a voice over artist picks a name for their business, like “ABC TERRIFIC VOICE”, a trademark search should be done to insure that no one else is using the name.  A search can easily be done on the United States Patent and Trademark Office (USPTO) at their website: http://www.uspto.gov/.  A search prior to using the name is wise so as to avoid any legal action for infringement of the trademark by the holder of the trademark.

            If the name is available, it would also be wise for a voice over artist to “trademark” the name by registering it with the USPTO.  This will help to ensure that the talent will not have to use a different name somewhere down the line to avoid confusion if someone else starts to use it.  However, filing of a trademark can be a very confusing task for the uninitiated so this is something a voice talent would probably want an experienced intellectual property attorney

26.  Wikipedia defines a trade mark/service mark as follows:  “A trademark or trade mark (represented by the symbol ™) or mark is a distinctive sign or indicator of some kind which is used by an individual, business organization or other legal entity to identify uniquely the source of its products and/or services to consumers, and to distinguish its products or services from those of other entities. A trademark is a type of intellectual property, and typically a name, word, phrase, logo, symbol, design, image, or a combination of these elements. There is also a range of non-conventional trademarks comprising marks which do not fall into these standard categories. The owner of a registered trademark may commence legal proceedings for trademark infringement to prevent unauthorized use of that trademark. However, registration is not required. The owner of a common law trademark may also file suit, but an unregistered mark may be protectable only within the geographical area within which it has been used or in geographical areas into which it may be reasonably expected to expand. The term trademark is also used informally to refer to any distinguishing attribute by which an individual is readily identified, such as the well known characteristics of celebrities. When a trademark is used in relation to services rather than products, it may sometimes be called a service mark, particularly in the United States.”

to handle.  Technically, since voice over artists render services, the name would be “serviced marked” rather than being “trademarked.”  Like copyrights, trademarks also survive the death of the trademark holder and thus your heirs can ensure no one infringes on the use of the name.
 
V)  A Few Words On Business Insurance; Is it Really Necessary?

            For voice over artists that have employees, and/or have a separate studio space outside of their home, then the answer to this question is a resounding YES!  For those who have employees, virtually every State in the Nation require that you carry worker’s compensation insurance to cover injuries to employees sustained while on the job.  Most insurance companies sell worker’s compensation insurance as part of a business policy.[27]

            Likewise, if you have a separate studio outside of your home then you should certainly have business insurance to cover losses from theft and fire, and to protect you in the event that someone is injured while inside your studio.
 
            For voice over artists that have no employees and work out of a home studio where people occasionally enter their home to use the studio, it would probably be an excellent idea to obtain business insurance, as home insurance policies often contain exceptions from covering “business uses” of your home.
 
            Finally, for voice over artists that have no employees and work out of a home studio where no one ever enters to use the studio, the business insurance is optional.  One advantage for any voice talent to obtain business insurance is that most policies cover “personal and advertising injuries.”  This will cover claims for certain offenses you commit in the course of your business such as libel, slander, disparagement, or copyright infringement in your advertisements, as issues were discussed earlier in this article.

            For solo voice talent with a home studio and no employees, these business policies are likely to be very inexpensive as the risk of loss is very low for insurance purposes.

            Generally, if a voice talent has any personal assets, it would be an excellent idea for the talent to work under some form of corporate structure, like an LLC, and to obtain business

27.  For articles about business liability policies and description of the coverage under business policies see:  www.business.com; www.techinsurance.com; www.allbusiness.com; www.localinsurance.com; www.insure.com.

 insurance.  This will provide the greatest protection to the talent so that their personal assets will not be at risk.  It would take quite a catastrophic loss to exceed these safeguards, and such a loss is very unlikely to occur in this business in this author’s opinion.

VI)  Tax Tips and Considerations

            A voice talent should be sure that they are operating their voice over business as a business and not a hobby.  The quicker the voice talent treats voice over as a money making venture, the better off they will be, in this author’s opinion, not only for tax purposes, but also in obtaining clientele and increasing income.  As discussed in the first section of this article, if the IRS determines that an activity is a hobby and not a legitimate business, it will not allow any deductions for any expenses of the “business.” 

            Also, a voice talent, in treating the “business” as a “business”, must keep detailed records for all expenses, including receipts.  A separate checking account should be set up for the voice over activities, and a talent should NEVER “commingle” fees received from voice over with personal funds.  Any automobile travel should be logged in a book recording the trip, the total mileage, and the business reason for the trip, i.e., audition or recording session.
 
            Of course, equipment purchased for the home studio can be deducted.  The talent has the option of depreciating the equipment over time, or can take a “Section 179” depreciation deduction, which allows deduction of up to $125,000.00 in equipment purchases in the year of purchase.[28]    $125,000.00 can certainly build a really nice home studio!  (Did I hear someone say “whisper room?”)
            
            Finally, one deduction that voice talent should be particularly cognizant of is the “home office” deduction.  This deduction is one that traditionally has raised a red flag for the IRS due to past abuses by taxpayers.  In order for one to take the home office deduction, the home office must be used exclusively for business.

            For instance, if a home studio is set up in the living room where the family also gathers to watch television, then the IRS will generally not allow a taxpayer to deduct the use of the living room as a “home office.”  If, on the other hand, the studio is located in a segregated area of the house, like a basement or attic, which has a sound booth, etc, then a home office deduction will most certainly be allowed as clearly the studio is being used exclusively for the voice over business.[29] 

VII)  Final Thoughts

            The author of this article has done his best to identify many of the legal issues facing the voice over artist in today’s environment.  It is not intended, however, to cover every possible situation under all circumstances.  The author urges the reader to seek out specific advice from legal and tax professionals concerning their specific situation prior to undertaking ANY action.
As the voice over industry grows and becomes more and more lucrative, many of these issues will be tested in the Courts, and surely, more and more issues will come to light.  It is the author’s wish that this article will prevent it’s readers from becoming ensnared in any of the issues raised herein.  Knowledge is power, and more power to you all.

29.  For more information on the Home Office Deduction, see IRS Tax Tip 2008-53 available at www.irs.gov.