I’ve finally decided to launch my own business and turn trance[]control into a sub division. I suppose many of you think this is silly but there’s a highly important lesson to be learned here. So for all aspiring, new and upcoming musicians out there, please pay attention.

Many years ago, during the glory days of MP3.com myself and my cousin Andreas made quite a hefty amount of money from sales and downloads through the former MP3.com (founded by Michael Robertson). We’re talking 6 figure USD amounts witch in retrospect is a BIG pile of cash for a set of youngsters in their early 20’s. Payments from MP3.com where made using regular checks put out in my name that where cashed in at our local bank. I then gave Andreas his half of the money. We also signed a form of some sort to exclude ourselves from paying US taxes – Back then, legal documents made as much sense as Greek or Hebrew to us and we never thought of running trance[]control as a company. After all, we where just two guys with a bunch of gear in our bedroom releasing music for free on the internet.

At the bank we then had to sign a form of consent that our earnings where reported to the National Bank of Sweden as the checks passed the maximum limit for a ”stealth” transfer (I believe the limit was about $7,500). By signing those documents we thought we’d done our part of reporting our earnings to the Swedish finance system and all was well.

The money earned where spent on supporting our lives (food, rent, clothes, bills, girlfriends and so on), both of us quit our regular day jobs and worked full time as trance[]control, glorious days by the way We also had a quite aggressive investment strategy, spending well over $30,000 on our studio gear alone to further improve and expand our rapidly growing project.

As trance[]control expanded beyond our wildest dreams we made several dumb mistakes as any young person would do, but some of them where critical.

1. We didn’t talk to our insurance company about our hefty pile of electronic gadgets to figure out wheather we would need a diffrent insurance.
2. We thought we reported our income through the forms signed at the bank when cashing checks.
3. Backup was a nice word back then, but we didn’t practise this because we had a SUPER STABLE computer.
4. Did I mention we never made sure we had coverage on our isurance or that we didn’t fully know weather our income was reported or not?

As many of you know, in the early 2000 – at the peak of trance[]control, uninvited visitors paid us a visit and decided to take everything away from us. Well, not everything – They ”forgot” to take our 24” CRT monitor and our custom 19” rack floor stands. As our studio disappeared over night, we turned to our insurance company who nicely told us that we had no coverage. Specifically due to to the nature of the gear (Not your average consumer electronics) and due to the fact that more then one person had the key to the room we used as a studio.

Due to our investment strategy we efficiently went from rich and successful to bankrupt and out of jobs overnight, and lost well over five years of work, original recordings, sound libraries and ideas. Quite a punch below the belt that one.

As we announced this story and the possible end of trance[]control, devoted fans started a fundraiser raising enough money for us to buy an old sound card and a computer so that we could start rebuilding our studio. I gotta way that those few weeks where among the most emotional of times I’ve experienced to this date and even though many of the tears where of the happy kind, I hope to never experience the same again.

So, arisen from the ashes we kept pounding forward but things never where quite the same – the burglary at our studio probably made a much bigger dent to our confidence and persona then we ever dared to acknowledge to ourselves or others around us. The next few years our pace went from slow to a grinding halt and we both put trance[]control on hold. I have to admit that I got tired of fighting to move forward and trying to find that last ounce of inspiration for another track.

Anyways, a few years back, the mail man came with a letter from the Swedish Tax Authority. The letter claimed that new intel cause irregularities to our annual income/tax report forms for the years around 2000 and we where asked to send in new forms with corrected information. It didn’t take me long to realize what this new intel might be but I called the man who sent the letter to find out more. It turns out, I had failed to report close to $90,000 in income and the taxman now wanted his part of the money (including penalty charges and interest aprox $72,000 with the currency exchange rate from 2001) as well as details of income from the before and after. To put this in perspective, a normal Swedish gross income recalculated to the exchange rate between Swedish Crowns and US Dollars in 2001 would be aprox $28,000.

I completely panicked and immediately started to design my escape, I was dead set on running and never look back. But thankfully a close friend of mine had a talk with his father (a former judge) who in his turn recommended me to work with the authorities instead of running. It turns out tax infringement in Sweden is a serious crime and the law has quite lengthy arms when it comes to forcing a mense.

So, I talked to Andreas who willingly agreed to bear his part. I took my friends fathers advice and turned to the man at the tax authority for help with all the paperwork. Thankfully he on his own authority decided to let us declare all income as a company instead of as a sole person with a hobby. This enabled us to deduct money spent on gear, studio rent, internet connections, websites and more from the actual income.

After digging out every piece of paper I could find regarding transactions and so fourth the tax man then helped me put it all together, he waived the penalty tax of 40% as well as the 7-11 years of interest for good measure and allowed us to claim that we didn’t know better.

So, when it all came down to our final judgement we where left with a bill of 172,000 Swedish Crowns each (aprox $17,000 USD in backdated currency exchange or roughly $25,000 USD each with todays currency). To solve this we both had to go hat in hand to the bank to get a loan, witch we both got. And I can happily say that I’ve redeemed myself as I paid off the last pennies on my loan last year in May.

As said there is an important lesson to be learned here. First of all, don’t try to run away from paying tax, but if you do – humbly admit your mistake and the authorities will work with you to solve the mishaps. And if you’re at the point where you are starting to make money from your hobby, set up a company so that you can use the revenue in the company to expand and buy new gear – in that way you don’t have to pay tax for every penny earned as taxes only are being charged on your profit.

So, as I want to put trance[]control back on the map, expand my studio using the revenue I get. I’ve just launched a company to house trance[]control as well as my studio, recordlabel, publishing company and so on.

The first investments have been made, my iMac, sound card, keyboard and KRK monitors and I’ll be moving on to getting that big old analog mixer later this week along with a set of audio interfaces to fill the inputs and outputs.

In the end I’d like to see myself at the point where I own a mid-sized studio similar to what we had back in the day. A studio that can accommodate my own productions as well as private lessons, mixing, mastering and production for aspiring, new and upcoming artists.

To sum this up I sincerely hope that anyone who reads this use my mistakes for learning and that you use my story to help others who may end up being in a similar situation. Looking back I’m still amazed that this didn’t completely break me and Andreas to pieces beyond repair.

In short, it’s time to be responsible and make it right.