Important Lessons from the Case of the Multi-Millionaire Author vs Tax Court


This post is in: Blog, Business
No Comments

It’s not often that I get a great Tax Court case to dissect and get to talk about marketing and branding for a successful thriller author all at the same time. Karin Slaughter (author of Grant County series and Will Trent series) lost her case on appeal and filed an appeal this past week in Tax Court.

First let’s talk about some of the marketing lessons. It’s interesting that the author (and the IRS) attributes her success in no small part due to her working since the 1990s to establish herself as a brand. As a brand author, she was able to provide reliable profits from her book series. She had a media coach and worked with publishers to develop her name and likeness into a successful brand. She did more than just write good books. She worked on the business and had logs of the time she spent meeting with publishers, agents, media contacts and others to develop and protect her status as a brand author

As a result, she received much larger than normal advance payments that were nonrefundable. Her contract called for payments for the noncompete with the publishers and payment for the right to advertise other author’s books in her books. She received a portion of the advertising proceeds for that. She also was paid an option price for the right of the publisher to negotiate for future works.

She began writing in the 1990s and by 2010, her income has jumped to $5.1 million (after expenses) per year. Yet, she spent the same amount of time writing that she did before.

What changed?

Her perceived value changed because she became a brand.

As a long-time non-fiction writer, I’m always intrigued in what other writers do to become better at what they do and to sell more books. This is a pretty good case for building a brand if you’re a writer. But isn’t this also true for any business? Become known for ONE THING and do that one thing very well to deliver experiences that no one else can do.

That’s how you make more money!

In tomorrow’s blog, we’ll look at how the tax strategy the tax preparers did got her in hot water. And more importantly, how it could have been fixed very simply if they had done one thing ahead of time.

Don’t miss tomorrow’s blog!

 



Leave a Comment