Backdated Refund Use from 2016

[Bill Brooks]

Photographers having to refund proceeds of a sale paid four years old is just another nail in the coffin of Stock Photography.

 

What happens if a photographer closes the account after a large refund of an old sale? Does the stock agency seize the images and continue to sell them until the debt is paid off? It would take an eternity at today's prices. Photographic sharecropping.

 

The internet cries out for regulation. Facebook and others are now being asked to explain themselves by the US congress, so maybe it will happen.

 

In the meantime if you are selling your stock photographs to generate a small amount of money to help pay for your expensive hobby, without much risk, you may want to look at means other than selling them as stock.

 

With todays absurdly low stock photo prices, and now chargebacks for old sales, there are better ways of covering your photography costs.
 

[Abiyoyo]

There should be a powerful reason behind for this that it is completely unacceptable for us but at the same time I can not see Alamy giving back easily his 50% of commission as well. Alamy, please tell us what happen.

[Cryptoprocta]

On 30/07/2020 at 23:38, William Caram said:

Just had a refund for an Editorial use from 18/10/2016...Australian use for $21.52 full Page!   Start18/10/2116 and End 18/10/2021

 

Refunded 29/10/2020....So what did client have it all that time and only now say they didn't use it?

I can't be bothered contacting Alamy about it!....just shake my head..I have heard of similar  refunds before i guess it is what it is..

I think you should force them to give you an explanation.

It's unlikely to be an explanation you or the rest of us would find acceptable, but at least force them to explain.

There can surely be no good reason for a refund after four years.

[Shergar]

4 hours ago, Bill Brooks said:

Photographers having to refund proceeds of a sale paid four years old is just another nail in the coffin of Stock Photography.

 

What happens if a photographer closes the account after a large refund of an old sale? Does the stock agency seize the images and continue to sell them until the debt is paid off? It would take an eternity at today's prices. Photographic sharecropping.

 

The internet cries out for regulation. Facebook and others are now being asked to explain themselves by the US congress, so maybe it will happen.

 

In the meantime if you are selling your stock photographs to generate a small amount of money to help pay for your expensive hobby, without much risk, you may want to look at means other than selling them as stock.

 

With todays absurdly low stock photo prices, and now chargebacks for old sales, there are better ways of covering your photography costs.
 

How does this leave either side as far as that years taxes. Not only have you lost the sale you have paid tax on it!!!!

Edited August 1, 2020 by Shergar

[spacecadet]

12 hours ago, Shergar said:

How does this leave either side as far as that years taxes. Not only have you lost the sale you have paid tax on it!!!!

You just put it down this year as a negative amount - it reduces your profits so you pay less tax. You only lose out by inflation and any change in the tax rate.

[Shergar]

44 minutes ago, spacecadet said:

You just put it down this year as a negative amount - it reduces your profits so you pay less tax. You only lose out by inflation and any change in the tax rate.

Thanks! So nothing for us to worry about. 

[Vincent Lowe]

55 minutes ago, spacecadet said:

 it reduces your profits...

 

Profits..?  er...that vaguely rings a bell.. someone remind me...🥴

[spacecadet]

17 minutes ago, Vincent Lowe said:

 

Profits..?  er...that vaguely rings a bell.. someone remind me...🥴

😀Sorry, a word like that, must mind my language on the forum.

[geogphotos]

I think that I would just take the same approach as the OP and take this on the chin. It doesn't happen all the time. We don't know the circumstances or anything about the commercial relationship that this buyer has with Alamy.  This is obviously within the terms of the Alamy contract - of course it is - and that same contract has attracted an unknown amount of other sales precisely because of its terms and conditions. 

 

I do tend to think that once an image has been paid for there should be no refunds.

 

But the other side of that is that we do tend to like quick payments. 

 

 

[geogphotos]

2 hours ago, spacecadet said:

😀Sorry, a word like that, must mind my language on the forum.

 

 

I get the impression most Alamy contributors don't need to make a profit. Otherwise there wouldn't be so many of us. 

 

For most people stock photography seems to be a hobby.  Perhaps a kind of validation for their photography? I use the term psychological income to describe the non-financial rewards. But as we have seen with the Shutterstock fight-back psychology is important.

 

The rather insulting term 'weekend warriors' used to be thrown around quite a lot. 

 

Agencies, portals, whatever you want to call them know this. Have a look at Pixabay providing totally free images and seemingly not short of contributors.

 

The serious point is that there will never be solidarity, and agencies will never need to actually care or worry while the vast majority of their imagery is supplied by people who are playing at it rather than depending on it to pay their rent and feed their kids.

Edited August 1, 2020 by geogphotos

[formerly snappyoncalifornia]

3 hours ago, spacecadet said:

You just put it down this year as a negative amount - it reduces your profits so you pay less tax. You only lose out by inflation and any change in the tax rate.

Simple!...Not. Here in the good 'ol USA we have tax accountants, tax lawyers, CPAs and Congress to create the most complicated tax code possible. In order to "put it down" as a net operating loss (NOL), assuming you are filing business taxes, believe me, you would pay far more in fees just to file the tax return. Or you could do it yourself.  Here are some instructions...sharpen your pencils!

An individual, estate or trust can obtain a tentative (quick) refund of taxes paid in prior years by filing a Form 1045, Application for Tentative Refund. A corporation uses a Form 1139, Corporation Application for Tentative Refund. The tentative refund form must be filed within one year after the end of the year in which the NOL arose. If this form is properly and timely filed (with all required attachments), the refund will be issued within 90 days after the later of (a) the date the form is filed or (b) the last day of the month that includes the due date (including extensions) of the tax return for the loss year. Although the IRS will issue a refund pursuant to a tentative refund claim, it can later audit the tax returns involved and recover the refund as well as any other tax deficiency that might exist. However, if the tentative refund is properly filed, the IRS will issue the refund check within the 90-day period. The IRS has math and computational error correction authority in a limited examination to change the taxpayer’s loss amount or related adjustments, and its decision is final, but the IRS may not make other, unrelated changes for the carryback year, such as decreasing a depreciation deduction or increasing gross income. See Treas. Reg. § 1.6411-3. The instructions for filing the Form 1045 should be carefully followed, including attaching all required forms (for example, copies of all schedules K-1 from partnerships, S corporations, estates or trusts that contribute to the carryback).  If the tentative refund approach is not used, a taxpayer may file amended tax returns for the carryback years to obtain the benefits of an NOL carryback. However, the IRS usually takes longer than 90 days to process an amended return, and it can conduct an examination of the loss year and/or the carryback years before issuing a refund. Handling an examination will often involve considerable time, during which any refund will be delayed. Obviously, if the examination discloses an issue, the refund might not be issued, and a tax deficiency might arise.

 

[geogphotos]

3 hours ago, formerly snappyoncalifornia said:

Simple!...Not. Here in the good 'ol USA we have tax accountants, tax lawyers, CPAs and Congress to create the most complicated tax code possible. In order to "put it down" as a net operating loss (NOL), assuming you are filing business taxes, believe me, you would pay far more in fees just to file the tax return. Or you could do it yourself.  Here are some instructions...sharpen your pencils!

An individual, estate or trust can obtain a tentative (quick) refund of taxes paid in prior years by filing a Form 1045, Application for Tentative Refund. A corporation uses a Form 1139, Corporation Application for Tentative Refund. The tentative refund form must be filed within one year after the end of the year in which the NOL arose. If this form is properly and timely filed (with all required attachments), the refund will be issued within 90 days after the later of (a) the date the form is filed or (b) the last day of the month that includes the due date (including extensions) of the tax return for the loss year. Although the IRS will issue a refund pursuant to a tentative refund claim, it can later audit the tax returns involved and recover the refund as well as any other tax deficiency that might exist. However, if the tentative refund is properly filed, the IRS will issue the refund check within the 90-day period. The IRS has math and computational error correction authority in a limited examination to change the taxpayer’s loss amount or related adjustments, and its decision is final, but the IRS may not make other, unrelated changes for the carryback year, such as decreasing a depreciation deduction or increasing gross income. See Treas. Reg. § 1.6411-3. The instructions for filing the Form 1045 should be carefully followed, including attaching all required forms (for example, copies of all schedules K-1 from partnerships, S corporations, estates or trusts that contribute to the carryback).  If the tentative refund approach is not used, a taxpayer may file amended tax returns for the carryback years to obtain the benefits of an NOL carryback. However, the IRS usually takes longer than 90 days to process an amended return, and it can conduct an examination of the loss year and/or the carryback years before issuing a refund. Handling an examination will often involve considerable time, during which any refund will be delayed. Obviously, if the examination discloses an issue, the refund might not be issued, and a tax deficiency might arise.

 

 

He is not talking about obtaining a refund of taxes paid.

 

He is suggesting writing it down as an expense/outgoing in the current tax year.

 

 

[formerly snappyoncalifornia]

Unfortunately, here in the States, that strategy wouldn't work. Let's say you were refunded $1000.00 for a past sale. If you report that as a loss or business expense, it would reduce your gross income by 1K, not your taxes. Assuming an 18% tax liability on 99K instead of the 100K you would pay 17,820 as opposed to 18,000. You've managed to recover a mere 180.00. All very rough figures of course. 

[geogphotos]

9 hours ago, formerly snappyoncalifornia said:

Unfortunately, here in the States, that strategy wouldn't work. Let's say you were refunded $1000.00 for a past sale. If you report that as a loss or business expense, it would reduce your gross income by 1K, not your taxes. Assuming an 18% tax liability on 99K instead of the 100K you would pay 17,820 as opposed to 18,000. You've managed to recover a mere 180.00. All very rough figures of course. 

 

 

It would be the same in UK. It would reduce your revenue for the current tax year. 

 

Using your figures if you recover $180.00 doesn't that mean you have recovered the original tax paid - not as a refund from the govt but by paying less tax this year?

Edited August 2, 2020 by geogphotos

[M.Chapman]

10 hours ago, formerly snappyoncalifornia said:

Unfortunately, here in the States, that strategy wouldn't work. Let's say you were refunded $1000.00 for a past sale. If you report that as a loss or business expense, it would reduce your gross income by 1K, not your taxes. Assuming an 18% tax liability on 99K instead of the 100K you would pay 17,820 as opposed to 18,000. You've managed to recover a mere 180.00. All very rough figures of course. 

 

But that's all we would expect to recover (i.e. only the tax originally paid and not the full amount of the refund). The system in the UK is the same.

 

Mark

Edited August 2, 2020 by M.Chapman

[spacecadet]

10 hours ago, M.Chapman said:

 

But that's all we would expect to recover (i.e. only the tax originally paid and not the full amount of the refund). The system in the UK is the same.

 

Mark

That's right of course. Just put it down as a bad debt like any other. We even have a box for it if you don't do three-line accounts but I don't think HMRC would expect to see such a trivial amount itemised. £1000 maybe. Not 20.

OP is in Australia so I'm sure their system is akin to ours. The Americans may choose to do things differently but I'd be surprised if this was different.

The good news is I don't see how it can go beyond about 6 years- that would be the legal time limit and Alamy would have to swallow it.

Edited August 2, 2020 by spacecadet

[William Caram]

Thanks for your debate / comments on my $21.52 Refund.....I think i got my money's worth😄...As for backdated refunds..well anything is possible in Alamy Land..It would be better if they looked after the supplier / photographer a little better...

[Alamy]

Hi everyone,

 

Just to clarify how we work with refunds.  When we say “refunded” technically this term’s not accurate as very rarely does money actually change hands.  Most common refund reasons are: incorrect invoice, customer’s price agreement not factored in or occasionally a customer’s project cancelled.

 

In the vast majority of these cases the image will not have been used but if it has, then you’ll see the sale re-entered with the correct invoice details.

 

Occasionally, companies that have bought images from us goes into administration and our Billing team can't access the money, this could be the case when seeing refunds that dates a few years back. If you have any questions about a specific refund, get in touch with our Contributor Relations team (contributors@alamy.com) and we can take a look for you. 

 

All the best, 

Alamy  

[Inchiquin]

59 minutes ago, Alamy said:

 

Occasionally, companies that have bought images from us goes into administration and our Billing team can't access the money, this could be the case when seeing refunds that dates a few years back

 

 

 

Sorry, but this doesn't make sense to me. If the contributor has been paid (however long ago) then this means that the funds have already been cleared.

 

Alan

[Alamy]

1 hour ago, Inchiquin said:

 

Sorry, but this doesn't make sense to me. If the contributor has been paid (however long ago) then this means that the funds have already been cleared.

 

Alan

 

That would be unusual, so best to email the Contributor Relations team so they could take a look at the specific case. 

 

Best,

Alamy 

 

[Sultanpepa]

On 31/07/2020 at 14:29, Pearl said:

I had a distributor sale refunded after 6 months and after it had been paid for.  The amount refunded was more than the original sale due to change in exchange rate so it cost me to sell nothing. It's really annoying and shouldn't be allowed.

 

Pearl

 

That is just unbelievable. There's no way Alamy should be paying back more than it received, and most certainly you shouldn't be out of pocket. That makes me angry. 😠

[spacecadet]

On 31/07/2020 at 14:29, Pearl said:

I had a distributor sale refunded after 6 months and after it had been paid for.  The amount refunded was more than the original sale due to change in exchange rate so it cost me to sell nothing. It's really annoying and shouldn't be allowed.

 

Pearl

Did you not query it at the time? It sounds at the least like a breach of contract- you're losing more than is due.

[Alamy]

On 31/07/2020 at 01:46, William Caram said:

 

Yes it was paid back then by my records..

 

Sorry, but this is not correct.

 

We've just posted the same message on the other thread on this subject, but here it is for those following this one:

 

Sorry for the delay in us stepping in here but we wanted to get the full details of this.

 

The sale in this case had not cleared and never would have - unfortunately we had to write this off as a bad debt given that the company who owed us (William) money went into liquidation.

 

When this happens it does tend to be rare and it is frustrating for all of us involved - we would only do it when we exhaust all avenues to secure the funds.

 

As you can see from this thread, misinformation can spiral out quite quickly regarding the situation surrounding these types of issues - if you have any questions about a refund (cancellation) of a sale you've received then please get in touch with us first so we can explain and look into things for you.

 

Thanks,

 

Alamy

[William Caram]

10 hours ago, Alamy said:

 

Sorry, but this is not correct.

 

We've just posted the same message on the other thread on this subject, but here it is for those following this one:

 

Sorry for the delay in us stepping in here but we wanted to get the full details of this.

 

The sale in this case had not cleared and never would have - unfortunately we had to write this off as a bad debt given that the company who owed us (William) money went into liquidation.

 

When this happens it does tend to be rare and it is frustrating for all of us involved - we would only do it when we exhaust all avenues to secure the funds.

 

As you can see from this thread, misinformation can spiral out quite quickly regarding the situation surrounding these types of issues - if you have any questions about a refund (cancellation) of a sale you've received then please get in touch with us first so we can explain and look into things for you.

 

Thanks,

 

Alamy

 

 

Apologies to Alamy, and all concerned...Thank you Alamy for your explanation.It was remiss of me to make comments on things i do not understand, and yes i should have contacted you in the first place for an explanation... 

[BobD]

I may be being stupid here but how was the contributor paid if the sale never cleared in the first place?

If the company went into liquidation owing Alamy surely that means the image invoice was never paid, so why did they pay the contributor.