Which, to be clear, is about studios making it appear that they never make a profit so that they can minimize their payout in bonuses, royalties, and taxes.
One particularly famous example: "Harry Potter and the Order of the Phoenix" earned $940M at the worldwide box office, yet Warner Brothers reported the film at a $167M loss on paper.
Link with an itemized, Hollywood Accounting-style breakdown:
If I have to explain myself to IRS why I bought 1TB drive instead of 500GB because in their opinion I did not have enough to backup, hence supposedly I attempted to defraud IRS on extra $6.00 of tax, why can they get away with hundreds of millions or even few billions?
The reason the IRS doesn't care is because they get their tax money regardless. They just get it from the subsidiary instead of the people ot should have gone to.
Yes. "Hollywood Accounting" means cooking the books to make a success look like a failure when to comes to paying people (like the IRS) who get a percentage of the profit.