Monday, December 04, 2006

Topic: Reply to Mark McGuire's T-U column re: WAMC, Chartock, Income Tax Evasion Scheme

Reply to Mark McGuire's 12/1/06 T-U column and blog:
"If it's on the Net, it must be true"
Also published as:
"Rumors on blogs are dilemmas in newsrooms"

NOTE: You can read the full thread of Mr. McGuire's Responses and WAMC Pirates' Replies in the Comments Section.

Mr. McGuire,
You wrote:
"There’s an Internet guy out there waging a very public crusade against a local radio host. Internet guy has charged the host with tax impropriety; the host and the station’s accountants deny it, and give clear reasons why the allegations are false.
"There’s been no story on this in the Times Union (and, as you noticed, no names here) — prompting the Internet guy to wail that the paper is hushing up the story.
"If a mere allegation — unsubstantiated even — is causing impact in the public debate, isn’t it a media outlet’s duty to report on its existence?"


Now Mark, maybe I assume too much, but it sounds to me like you are referring to my article published on the WAMC Pirates Web site, the one entitled "Tax Cheat: How Alan Chartock conspired with WAMC to avoid paying IRS."

You state that "the host and the station’s accountants deny it, and give clear reasons why the allegations are false."

Well, that's nice to hear --- finally.

Now, specifically just what were those "clear reasons" given by Mr. Chartock and accountant William Kahn to prove the allegations false? And to whom did they give them, and in what publication were those reasoned explanations written up?

As far as I can tell, neither individual has made any attempt publicly to offer clarity either in a public forum or to me personally as author of the original article. Plus, other than what I reported in the article in an interview Mr. Kahn gave me, neither Chartock nor Kahn has responded to specific questions nor to my requests for what you call "clear" explanations.

Please note that in the article, specific pages from WAMC's IRS Form 990's are excerpted for all to see. Readers can view for themselves the failure of WAMC to accurately account to IRS valuable corporate perquisites and taxable fringe benefits paid to WAMC's CEO.

So far not a single individual from WAMC nor from Kahn's accounting firm (nor anyone else for that matter) has come forward to refute a single one of the specific allegations made in the article.

If Messrs. Chartock or Kahn have given you "clear reasons why the allegations are false", you have an obligation now (since you raise the subject by writing about it in your column) to make that information public for the rest of us. That would be the least the Albany Times-Union could do since the newspaper hasn't bother to investigate this matter on its own.

As it stands now, WAMC's own IRS filings as a 501c3 tax-exempt charity, along with the corroborated testimony of numerous folks affiliated with WAMC concerning those extensive and valuable perqs given the boss, make a far more convincing case beyond reasonable doubt than just your blanket (and vague) assurance that 'clear reasons' have been given that the allegations are somehow false.

For more than two decades Mr. Chartock has received expensive fringe benefits from WAMC that consistently went unreported to IRS apparently in an effort by the public broadcaster to shield its CEO from having to pay income taxes on their value. I await the list of 'clear reasons' that were given to refute this allegation.

Very truly yours,
Glenn M. Heller, editor
WAMC Northeast Pirate Network
e-mail: editor@wamc.net
Web site: http://www.wamc.net/
Blog: http://www.wamcnet.blogspot.com
Snail mail: P.O. Box 100, Monterey, MA 01245
Telephone: 202.973.2141

9 Comments:

Anonymous Mark McGuire said...

Subject: RE: "There's an Internet guy out there waging a very public crusade against a local radio host."
Date: Fri, 1 Dec 2006 22:29:58 -0500
From: "Mcguire, Mark" MMcGuire@TimesUnion.com
To: "Glenn M. Heller" hottomato@rocketmail.com

Mr. Heller:

You cavalier treatment of facts, conclusion jumping and scurrilous personal attacks grow tiresome.

Here is your latest falsehood:
"That would be the least the Albany Times-Union could do since the newspaper hasn't bother to investigate the matter on its own."

(You can start your corrections with getting the name of the paper right.)

The fact is I looked into the matter, as previously discussed, proving your statement is patently false. And, no, I don't have to write every "Man did not beat his wife" story.

And, no, I do not have the obligation to do your "reporting." I will give you this: Look up the word income, and how it can be calculated.

But you did that, right?

As for getting journalism critiques from someone who brazenly violates copyright laws and other ethical concerns, well, draw your own conclusions. You have demonstrated time and again you start with a conclusion
-- Chartock is guilty of XXX -- and work from there.

In short, sir, the Times Union, at least as I see it, has no moral, journalistic or other obligation to assist in your brazen vendetta. (The irony of this, of course, is that Chartock and I have frequently battled, as anyone who's listened to a WAMC fund drive can attest.)

For someone who has such a colorful personal and legal past to say the least, and
has never answered with any clarity why you wage this battle from another state (please, no more platitudes), I don't understand why you do what you do.

But that is your right.

If new (note word) facts to the contrary surface, I will again (note word) look into the matter.

Regards,

Mark McGuire

[The e-mail above posted without Mr. McGuire's permission by Glenn M. Heller, Blog Editor]

Monday, December 04, 2006 6:07:00 AM  
Blogger Blog Editor said...

Date: Fri, 1 Dec 2006 23:02:30 -0800 (PST)
From: "Glenn M. Heller" hottomato@rocketmail.com
Subject: RE: "There's an Internet guy out there waging a very public crusade against a local radio host."
To: "Mcguire, Mark" MMcGuire@TimesUnion.com
CC: albanyeye@gmail.com

Mark,
It's clear to me that you have NOT read the entire 'Tax Cheat' article (especially the linked examples of forms WAMC actually filed with IRS). There are sections of IRS Form 990 - "Return of Organization Exempt From Income Tax" that must be completed by WAMC in the manner defined by IRS. I indicate these sections in my article. WAMC failed to fill-out the forms accurately.

For example, see how WAMC filled-out IRS Form 990, the section entitled: 'Statements About Activities' - Schedule A - Part III.
SEE: http://www.wamc.net/WAMC990-III-2.html

This section is where WAMC would have had to acknowledge (by placing a check mark in the "YES" column) that WAMC had indeed provided Chartock (a trustee, director, officer, and key employee) with use of company-owned goods, services, or facilities (in this case a company-owned apartment, a company-owned car, etc.).

Note that WAMC's tax preparer placed a check mark in the "NO" column -- a blatant falsehood (and Chartock, as WAMC's CEO, signed and verified the accuracy of the return).

Also, see how WAMC listed Mr. Chartock's expense account and other allowances on IRS Form 990, section entitled: 'Part V - 'List of Officers, Directors, Trustees and Key Employees'.
SEE: http://www.wamc.net/WAMC990-V-9.html

This section is where WAMC would have had to acknowledge (by placing a dollar amount in the column labeled "Expense Account") that WAMC had indeed provided Chartock (a "corporate officer" and an IRS-defined "key employee") with "taxable (and non-taxable) fringe benefits" including "the value of the personal use of housing, automobiles, or other assets owned ... by the organization ...., as well as any other taxable and nontaxable fringe benefits."

Note that WAMC's tax preparer wrote the number ZERO dollars in the column -- another blatant falsehood (also verified by Chartock when he signed the return before sending it to IRS).

Mark, these are IRS' regulations. I don't make them up. In the article, I cite not only the exact wording of the regulations themselves, but also provide links to text of those regs on IRS' own Web site.

You seem to be hung-up on the definition of the word "income". Taxable fringe benefits MUST be reported to IRS as "income" paid to anyone, especially a corporate officer or trustee, getting those specific benefits. WAMC is required to report to IRS (both on the org's Form 990, and on the individual employee's IRS Form W-2 - "Wage and Tax Statement" any benefit that an employee receives from the organization. IRS even cites the following example: "you (the employer) provide an employee with a fringe benefit when you allow the employee to use a business vehicle to commute to and from work."
SEE: Employer's Tax Guide to Fringe Benefits - http://www.irs.gov/pub/irs-pdf/p15b.pdf

Mark, if Chartock commutes to and from WAMC with a WAMC-owned vehicle, then under IRS rules he is receiving a taxable fringe benefit from WAMC which by law must be reported by WAMC to IRS as taxable income to Chartock. It is supposed to be reported on at least two forms: the annual Form 990 "Return of Organization Exempt From Income Tax" and the annual IRS Form W-2 "Wage and Tax Statement" given to Chartock prior to April 15th so he can include it with his personal IRS Form 1040 "US Individual Income Tax Return".

Question: If WAMC failed to report "taxable fringe benefits" paid to Chartock by omitting that information from both the Form 990 as well as from Chartock's annual Form W-2, then do you honestly believe Chartock (out of the goodness of his heart) would have reported the additional benefit income anyway to IRS on his personal 1040 return (even though WAMC had never reported the data on any of its forms)?

Of course, until Chartock publicly releases his 1040's, the answer is known only to him, his accountant and IRS, but regardless, this is NOT relevant to (nor does it negate) the fact that WAMC is required to report the value of all taxable and non-taxable fringe benefits paid to its officers and trustees, and to report that information accurately. This was NOT done by WAMC for the past twenty years.

In other words, regardless of how Chartock chooses to define "income", it has always been up to WAMC to declare the value of any "fringe benefit" it gave its CEO. This was NOT done.

By the way, the reason IRS tightened these rules governing what tax-exempt organizations are required to declare to IRS was because there were dishonest trustees and corporate officers in some tax-exempts who were receiving all sorts of generous perquisites and organization freebies without declaring the value of those benefits as income.

By tightening reporting requirements on the orgs themselves, IRS theoretically closed the reporting gap. Even if an executive failed to report the value of fringe benefits received on his personal income tax filing, IRS would still have sufficient data to act upon based on what the org itself had filed.

In the case of WAMC, Chartock has been able to get away with his alleged scam because not only is he the one who receives the "undeclared" benefits, he is also the one who verifies and signs-off on what is reported to IRS on WAMC's annual Form 990, AND he is the one who determines what data is submitted by WAMC to IRS on his annual W-2 Form.

Hope this helps to clarify the matter. If you don't believe me, please ask your own accountant to explain the two sections of IRS Form 990 dealing with 'Statements About Activities' - Schedule A - Part III ; and 'Part V - 'List of Officers, Directors, Trustees and Key Employees'.

Also, call around to any of the honest not-for-profits in and around the Albany area, ask to speak to the CFO, and find out what reporting practices are deemed acceptable to IRS when it comes to reporting taxable fringe benefits paid to executives.

Better yet, contact the IRS press office in Albany or Washington, D.C. and ask them!

Very truly yours,

Glenn

P.S. You might also be interested in reading the following two IRS-related discussions, one entitled "Executive Compensation - Fringe Benefits Audit Techniques Guide"; and the other entitled "Self-dealing". Both contain material that may answer your questions about what constitutes 'income' for executives of not-for-profits.
SEE: Executive Compensation - http://www.irs.gov/businesses/corporations/article/0,,id=134943,00.html
SEE: Self-Dealing - http://www.npccny.org/Form_990/Exp_Self-Dealing.htm

Monday, December 04, 2006 6:34:00 AM  
Anonymous Mark McGuire said...

Subject: RE: "There's an Internet guy out there waging a very public crusade against a local radio host."
Date: Mon, 4 Dec 2006 09:51:24
From: "Mcguire, Mark" MMcGuire@TimesUnion.com
To: "Glenn M. Heller" hottomato@rocketmail.com

Dear Mr. Heller:
You deserve more of a response than the one given. (Yes, I thought about this over the weekend.)

Income can mean more than salary; according to the accountant and board, car expenses like mileage and fair lease value are computed and listed as income, according to IRS guidelines. This has been an ongoing practice.

Again, did you examine this?

Mark McGuire

[The e-mail above posted without Mr. McGuire's permission by Glenn M. Heller, Blog Editor.]

Monday, December 04, 2006 5:03:00 PM  
Blogger Blog Editor said...

Date: Mon, 4 Dec 2006 09:38:21(PST)
From: "Glenn M. Heller" hottomato@rocketmail.com
Subject: RE: "There's an Internet guy out there waging a very public crusade against a local radio host."
To: "Mcguire, Mark" MMcGuire@TimesUnion.com
CC: albanyeye@gmail.com

Dear Mark,
Indeed, I did fully examine WAMC's IRS Form 990's - "Return of Organization Exempt From Income Tax", going back for many years. (You can link to Fiscal Years 1999--2005 from my WAMC Pirates Web site). It is on those IRS returns where all this relevant information you refer to is supposed to be documented and annotated for IRS. (Partly so that if there are questions about fringe benefit income tax evasion, IRS can match the relevant information on the organization's 990 report with the data on an organization officer's annual IRS Form W-2 "Wage and Tax Statement" as well as on the individual's annual IRS Form 1040 personal tax return.)

What is the actual evidence that you rely on, other than taking the accountant's and the board's word for it, that those expenses "are computed and listed as income, according to IRS guidelines"? Specifically who on WAMC's board stated this? Also, are you referring to accountant William Kahn? Also, did anyone show you any specific documents to back-up and prove what they were saying? Also, why didn't WAMC just list the information, as IRS requires, in the appropriate sections on Form 990?

As far I can can tell (and please, PLEASE show me where I am wrong), those "car expenses like mileage and fair lease value" have NOT been listed or even acknowledged on the Form 990, at least not as IRS' stipulates they should be, and certainly NOT "according to IRS guidelines".

The value of fringe benefit "income" is supposed to be listed in at least two separate sections of WAMC's Form 990 return: in Statements About Activities' - Schedule A - Part III (by marking 'YES' in the appropriate boxes); and also in 'Part V - 'List of Officers, Directors, Trustees and Key Employees' (by notating the total value of the fringe benefits paid the individual in the column labeled Expense Account and Other Allowances.

When I spoke to WAMC accountant William Kahn, he refused to answer any specific questions regarding any of this (as I accurately reported in my article). I attempted on a number of occasions to reach Mr. Chartock and left numerous telephone messages seeking his comments for the article, but he did not see fit to return any of my calls.

Also, you mention car expenses being "computed and listed as income", but did anyone acknowledge the fair market value of use of company-owned apartments and use of the company-paid-for chauffeur (amongst a long list of things) as being computed and listed as taxable fringe benefit income paid to the boss?

Looking forward to your reply.

Regards,
Glenn

Monday, December 04, 2006 5:06:00 PM  
Anonymous Mark McGuire said...

Subject: RE: "There's an Internet guy out there waging a very public crusade against a local radio host."
Date: Mon, 4 Dec 2006 12:50:00
From: "Mcguire, Mark" MMcGuire@TimesUnion.com
To: "Glenn M. Heller" hottomato@rocketmail.com

What is very clear is you have made a very HUGE jump to get to a blaring TAX CHEAT! headline. You are allowed to compute perks as income, as was done here.

You do prove my point about bloggers: Often useful information surfaces from individuals that have a very narrow focus or ax to grind. But often you have to week through the hyperbole of vendetta.

(So when you make allegations about bias at the Times Union, I have to laugh. The words kettle and black come to mind.)

I will make it a point to go over the 990 (again) when it comes out. But as it is, for a newspaper that has not investigated the issue, it seems I've spent an awful lot of time on this.

Best of holidays to you and yours.

mark mcguire

[The e-mail above posted without Mr. McGuire's permission by Glenn M. Heller, Blog Editor.]

Monday, December 04, 2006 5:10:00 PM  
Blogger Blog Editor said...

Date: Mon, 4 Dec 2006 13:02:21 (PST)
From: "Glenn M. Heller" hottomato@rocketmail.com
Subject: RE: "There's an Internet guy out there waging a very public crusade against a local radio host."
To: "Mcguire, Mark" MMcGuire@TimesUnion.com
CC: albanyeye@gmail.com

Dear Mark,
Why wait to examine WAMC's Form 990's? Why not do it ASAP? Now that WAMC and Chartock have been 'outed' regarding the income tax avoidance scam, wouldn't it be worthwhile to examine all the returns that were filed BEFORE that scam had been made public, at a time when the perpetrators still thought they were getting away with it?

(Ya know, Mark, it sure would be nice if you just took the time to read "Tax Cheat" in it entirety. Then we would be on relatively the same 'learning curve' rather than you playing catch-up with statements that indicate to me that you just don't know the IRS guidelines regarding how tax-exempts are supposed to treat executive compensation and fringe benefits.)

Also, you could at least answer my basic questions. Were you shown evidence to prove anything you were told (including whether Chartock actually paid income taxes on any of his many WAMC perks)? With whom on the WAMC board did you actually speak? Why didn't WAMC just fill-out its Form 990 according to the IRS Guide? Were income taxes paid on the fair market value of the use of apartment and chauffeur?

I don't dispute that the value of a taxable fringe benefit is considered "income" to the recipient of the benefit. The thing you don't seem to want to acknowledge is that tax-exempts are required by IRS to account for and report fringe benefits paid to organization officials in very specific ways. WAMC has failed to do this accounting accurately for twenty years, and, wonder of wonders, the one benefitting from this unexplainable failure is the CEO.

"Tax Cheat" more than aptly describes the income tax avoidance scam that WAMC was perpetrating. It likely would still be the "modus operandi" at WAMC had publication of "Tax Cheat" not spilled-the-beans!

So yes, I too look forward to the release of WAMC's Fiscal 2006 Form 990 report, but it won't change what's past. Remember, there is NO statute of limitations on the filing of false or fraudulent federal returns, or on a willful attempt to evade federal taxes.

Regards,
Glenn

Monday, December 04, 2006 6:49:00 PM  
Anonymous Anonymous said...

Glenn Heller's big mouth is a great advantage. It allows him to suck more than one cock at a time.

Friday, December 22, 2006 9:31:00 PM  
Anonymous Glenn Heller said...

In regard to the annonymous comment suggesting I can fit two cocks in my mouth at the same time, I'd just like to say, MMMMMPH MMMMMM MMMMMM UUUUNGPHHH, MMM MMMMMM MMMMM MM MMMMPH!

Sunday, December 24, 2006 6:35:00 AM  
Anonymous Glenn Heller said...

By the way, see the comments on my post Use of the term "Tax Cheat" for a description of the taste of semen. You'll want to try some right away!

Friday, January 12, 2007 10:58:00 AM  

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