Known for her kitschy art and self-described yenta persona, Rhoda Grossman has scaled back on entertaining and drawing caricatures at parties in the last several years in order to take on more corporate accounts.
But she’ll never forget the hours spent at bar and bat mitzvah celebrations, doodling exaggerated “altered” egos and cracking jokes to pay her bills.
Neither will the California State Board of Equalization.
Following an eight-year audit, the board is demanding more than $30,000 in uncollected sales tax from the freelance artist, who operates under the titles Rhoda “Draws a Crowd” and “the Renaissance Yenta.”
A longtime Jewish Bulletin advertiser, the Chicago native is known for her quick wit and outrageous shtik. As the Yenta, Grossman visited cocktail parties in a mink stole, opera gloves and harlequin glasses, carrying a rubber chicken. She sang improvised campy lyrics to popular tunes.
Grossman is also the creator of a defunct line of greeting cards called the Bagelmans.
But to the equalization board, this funny lady is nothing but a tax dodger. The board considers artists like Grossman retailers, and their sketches commodities to be taxed. Grossman disagrees.
“Whether or not the `victim’ gets a print or product is not the purpose of my being hired. My function is to keep people entertained,” she said, adding that she is paid by the hour and not by the sketch.
To prove her point, she had 75 former clients sign affidavits stating Grossman was hired to entertain with a “unique blend of sketches and comedy.” She is paid for her time and entertainment, and not sketches per se.
Nonetheless, Grossman is still embroiled in a year-and-a-half-long battle that has left her both emotionally and financially drained.
According to California law, Grossman should have obtained a retail license and resale number when she began running her business from her Sausalito home 15 years ago, and she should have charged her clients sales tax. She did neither.
“I didn’t know I had to,” Grossman said.
Regulation 1501 states that providers of services are exempt from sales tax when the primary purpose of a transaction is a service such as entertainment, and that there is no tax liability even if some tangible personal property is transferred. However, an annotation to this regulation specifically denies protection to party caricaturists.
The annotation was written in 1991. Grossman is being asked to pay back taxes from 1987 onward.
“Ignorance of the law is no excuse,” Grossman said. “I’m willing to pay for where it’s real clear there is tangible personal property [transferred]. But this entertainment thing is off the wall.”
Not so, says the equalization board.
Its collection department put liens on Grossman’s personal property, “which is nothing,” she said, and set up a payment plan of $50 a month. This amount is only for the first quarter of 1987.
Grossman is appealing the case Nov. 20 in Sacramento. If she wins, her lawyer assures her, the claim for back taxes for the entire eight years will be dropped.
In the meantime, she has set up her own legal defense fund, which is called AAARGH (Artists Against Arbitrary Regulation and Government Harassment). All donors who contribute $35 to the cause receive a T-shirt reading “I WENT TO A TAX AUDIT AND ALL I GOT TO KEEP WAS THIS %!*# T-SHIRT!”
She’s also holding an open studio fund-raiser from noon until 5 p.m. Sunday, Nov. 10 at 216 Fourth St. in Sausalito.
“This is really a nightmare, but I’m finding I have more chutzpah than I thought I had,” said the 55-year-old, chain-smoking artist. “If it was just me, I would have thrown in the towel and gone bankrupt. Let them pick my pockets; all they’d find is lint — designer lint.
“I’m fighting this for all artists. I need to take a stand and at least go through the appeals process,” she continued. “Otherwise, I can see caricature artist going to Arizona or Nevada. And clowns who `manufacture’ balloon animals at parties will probably be the next target.”