Also, for that ONE year, her taxes are more likely to be kosher. Even if its a hobby, but a hobby that makes money, you can write off the hobby's (legitimate, documented) expenses against the hobby's income. The problem arises from the schedule C loss in all the other years.
Profit in 1 year does not a business make. The IRS has a policy:
The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year ? at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses. (Citation).
It generally sounds like the state auditor phrased things rather poorly, but someone who has been doing an activity and showing a loss for 9 years out of 10 is trying to write off their hobby on a schedule C, rather than a legitimate business.
Overall, a good general rule: Don't show a loss on your schedule C, especially on a repeated basis.
Or at least the lawyers: Steele, Duffy, and Paul Hansmeier. From their point of view, its far less painful for them to attend.
They tried their last minute "You have no jurisdiction" gambit, got bench-slapped for it hard, and Judge Wright in his writing has made it pretty clear that he wants those three in his courtroom, even if their lawyer won't accept service on their behalf.
Thus they can either fly coach and turn up today or fly Con-Air and turn up for the next hearing.
Remember, a Supernova is an implosion
The payday loan links means they were hacked. There are some VERY bad SEO operators who are injecting that S@#)(* around the web.
Cutting off the credit card funding is how both the pharmaceutical spammers and "OEM Software" spammers have been largely driven out of business:
http://www.cs.gmu.edu/~mccoy/papers/CCS12Priceless.pdf
Google doesn't need to do this: the copyright holders need to do it. And they can. They just have to care enough to do so.
Far easier ways...
Technology is not the primary solution, good operational security (OPSEC) is.
E.g. http://www.wired.com/opinion/2013/05/listen-up-future-deep-throats-this-is-how-to-leak-to-the-press-today/
is my discussion of the problem.