Snyder v. United States

Snyder (plaintiff) was an active attorney practicing law about 40 hours per week. In 1972, Snyder began working on a book of photographs of Colorado with the goal of selling and publishing the finished product. Snyder had previously taken photographs as a hobbyist, but in 1972 he began spending about 30 hours per week on photography in addition to his legal practice. Snyder also began spending significant money on the project, including purchasing commercial-quality equipment and traveling to New York to meet with publishers. Despite his efforts, Snyder was unable to sell his book. Nevertheless, Snyder deducted expenses that were attributable to the project. The Internal Revenue Service (IRS) determined that Snyder’s deductions were not allowable and, as a result, assessed $6,913.41 in additional income taxes due for 1972 and 1973. Snyder paid the taxes, filed a refund claim, and sued to recoup the amount paid. The district court agreed with the IRS that the deductions were not allowable. The district court found that Snyder held a sincere hope of selling the book and making a profit but concluded that Snyder was working to create a literary capital asset and was not in the trade or business of producing a book. The district court appeared to accept the IRS’s position that an individual cannot be in the trade or business of writing if no book has been produced. Snyder appealed.