®/™Use of the term "Tax Cheat"
Alan S. Chartock
Dear Mr. Weaver,
Concerning Mohawk Valley blog which today discusses e-mails between Times-Union columnist Mark McGuire and myself dealing with WAMC, Alan Chartock, and an Income Tax Evasion Scheme.
Please note the oath printed prominently above the signature panel on IRS Form 990 - "Return of Organization Exempt from Income Tax". It reads: "Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete."
SEE: http://www.wamc.net/WAMC990-Sign.html
You state: "I would not go to the extreme that Heller does in calling Alan Chartock a tax cheat. The fact that he signs tax returns doesn‘t mean he reads them. That may not legally excuse him from responsibility for any errors in returns, but it doesn’t necessarily make him a cheat."
Sorry Mr. Weaver, but words mean something, most especially the words in a signed oath to IRS. The fact that Mr. Chartock is chief executive officer of a tax-exempt charity, and signs that charity's annual IRS return means that he better read that return -- every line of it! Otherwise, what is his purpose as the salaried $150K per year CEO of the organization?
Pardon me if I am less than sympathetic concerning any notion that this CEO, at the helm of this multi-million dollar tax-exempt org for more than twenty years (and who is acknowledged by friend and foe alike to be the ultimate micro-manager), would somehow not know the IRS rules governing how executive compensation at tax-exempts is to be accounted for, including how fringe benefits paid to org officials are to be calculated and reported to Uncle Sam.
At minimum, Mr. Chartock has got to suspect that somebody was paying for those new WAMC cars he's been driving these past twenty years, and that somebody was footing the bill for his chauffeur, for his use of furnished intown hideaways, and for his myriad other org perks so delightfully within easy reach these many oh-so-flush years at the helm.
Calling Alan Chartock a "tax cheat" isn't extreme, it is calling a spade, "a spade!"
G. M. Heller, editor
WAMC Northeast PIRATE Network
ALSO SEE: "TAX CHEAT! - How Alan Chartock conspired with WAMC to avoid paying IRS."
Labels: Alan Chartock, Albany, executive compensation, fringe benefits, media, public radio, WAMC
posted by G.M.Heller at 3:44 AM
13 Comments:
COMING MONDAY: Glenn Heller comments on the taste of semen.
Mmmmmm...salty yet sweet. Rather like yogurt coated pretzels, except with an oddly "alive" presence.
Glenn - Why is the WAMC pirates blog registered to you at a Maryland address? Why do you care about NY business so much? Who's paying you?
Please, Glenn: Do tell us more about the taste of semen.
hey anonymous,
why so nasty, why is this on your mind?
Josh Cohen
I thought this would be interesting reading for the WAMC crew, who looks at this site each work day (Selma Kaplan):
http://www.guidestar.org/DisplayArticle.do?articleId=1111
IRS Increases Enforcement Focus on Nonprofit Executive Compensation
Note: The following discussion is provided for informational purposes only and is not intended to serve as legal or tax advice. For specific information about compensation practices for exempt organizations, consult your attorney or tax advisor.
The IRS is sending some pretty strong signals these days that it is going to be looking hard at compensation and benefit levels for nonprofit executives. And nonprofits that want to avoid unwanted scrutiny may need to be more familiar with such terms as "disqualified persons," "excess benefit transactions," and "rebuttable presumption of reasonableness."
*New Form 990 Instructions
The 2006 instructions require more information to be reported on compensation and who sets compensation. Legislation in 2006 required more stringent definitions of "disqualified persons"—those in a position to exercise substantial influence over an exempt organization—and increased penalties for those who participate in an "excess benefit transaction" (a financial transaction in an amount that exceeds market rate) in violation of the rules. The changes are summarized and the new instructions are available on the IRS Web site (see the links at the end of this article).
* New IRS List of Good Governance Practices
A draft list of "Good Governance Practices for 501(c)(3) Organizations" was released by the IRS on February 7, 2007. It stated:
Charities should generally not compensate persons for service on the board of directors except to reimburse direct expenses of such service. ... Charities may pay reasonable compensation for services provided by officers and staff. In determining reasonable compensation, a charity may wish to rely on the rebuttable presumption test of section 4958 of the Internal Revenue Code and Treasury Regulation section of 53.4958-6.
*IRS Findings of 2006 Executive Compensation Initiative Project
In 2006, the IRS concluded an Executive Compensation Initiative Project (started in February 2004). In a report just released on Parts I and II of the project, the IRS noted that "Significant reporting issues exist—Over 30% of compliance check recipients amended their Forms 990. Fifteen percent (15%) of the compliance check recipients were selected for examination." The report also states, "Where problems were found, significant dollars are being assessed (25 examinations have resulted in proposed excise tax assessments under Chapter 42, aggregating in excess of $21 million, against 40 disqualified persons or organization managers.)"
*IRS Investigation of Nonprofit Hospital Executive Compensation
In 2006, as part of an investigation into how nonprofit hospitals set and pay compensation to their executives, the IRS sent questionnaires to more than 500 hospitals. In 2007, the IRS plans to evaluate the responses. Next steps could include more written guidance, new examinations, and additional compliance checks. Congressional leaders have also expressed interest in hospital executive compensation, particularly as the debate over medical costs and coverage has intensified.
*Matching Data Reported to the IRS and SSA
The 2007 plan for the IRS Exempt Organizations Division also includes a project to ensure that nonprofit organizations report and pay employment taxes properly. Recently, the IRS developed a process to match information reported to the Social Security Administration with IRS data. The IRS will select the targets for examination using a risk-modeling program developed in 2006 that identifies high-risk compliance patterns.
What the IRS Notices on Form 990
The nonprofits that were included in the IRS compliance check were chosen because of omissions on their Forms 990. To avoid making similar mistakes, be sure to answer and include any required schedule or explanation for the following sections of the form:
*Schedule A, Part III—List transactions between related individuals or leases of property to officers, directors, or shareholders. If there are no such transactions, note, "None."
*Form 990, Part IV, line 50—List receivables from trustees, officers, directors, and key employees. If there are no such transactions, note, "None."
*Form 990, Part V-A, column B—Complete for each listed officer, trustee, or key employee, even if they are not compensated.
*Form 990, Part VI, question 89—Checkbox for "Entered into an excess benefit transaction." Be sure to check "No" if there were no excess benefit transactions.
What a Nonprofit Should Do
To avoid problems with executive compensation, the IRS advises nonprofits to:
*Set compensation in advance using appropriate comparability data.
*Make sure that no one involved in setting salaries has a conflict of interest.
*Document all decisions on compensation.
*Avoid penalties by reporting all economic benefits to officers, directors, and key employees on Form 990. (By the way, is Alan Chartock's WAMC vehicle listed in this way, nope, and it was me who drove Chartock, in the WAMC car, to his SUNY New Paltz job each Friday, what does that have to do with WAMC?)
Having good compensation practices means having established policies and procedures, doing the homework of finding and assessing comparables, making decisions based upon them, and then recording the actions taken. You are not likely to get in trouble with the IRS if you develop and follow procedures for setting compensation and if you make an honest, responsible effort to determine appropriate compensation based on your size, revenues, organizational structure, and mission. Be sure to:
*Document the policies and procedures in advance and include them in board minutes.
*Collect comparable salaries (for like services, in like enterprises, in like circumstances). Surveys and databases of salary information as well as the Form 990 images on the Web make these data more easily available than ever before.
The IRS has actually provided a checklist for organizations that can be used to establish procedures that will help them avoid an IRS investigation. Follow the checklist, and the burden of proof that the organization is breaking the rules moves to the IRS. This checklist can be found at "Compensation Issues for Exempt Organizations," www.irs.gov/pub/irs-tege/phone_forum_5_2006.pdf, slides 13-19.
To establish a rebuttable presumption of reasonableness (meaning the burden of proof that the compensation is unreasonable is on the IRS), nonprofits should use an independent survey of comparability data. Information and software that easily provide the necessary analyses can be obtained from GuideStar; ERI Economic Research Institute; SalariesReview; Abbott, Langer Association Surveys; and other salary survey sources that specialize in the nonprofit sector.
By obtaining and using appropriate data, nonprofits can set compensation that attracts and retains talented staff and is aligned with organizational missions and values. At the same time, they can ensure that charitable dollars are spent on achieving the mission, not answering questions from the IRS, state charity regulators, and Congress.
More Information
*2006 IRS Form 990 instructions, www.irs.gov/pub/irs-pdf/i990-ez.pdf
*"Compensation Issues for Exempt Organizations," www.irs.gov/pub/irs-tege/phone_forum_5_2006.pdf, especially slides 13-19
*"Good Governance Practices for 501(c)(3) Organizations," www.irs.gov/pub/irs-tege/good_governance_practices.pdf
*"Intermediate Sanctions," www.irs.gov/charities/charitable/article/0,,id=123298,00.html
*"May 17-18, 2006, Executive Compensation Phone Forum," www.irs.gov/pub/irs-tege/may_17_final_script_exec_comp_phone_forum.pdf
*"Rebuttable Presumption Procedure Is Key to Easy Intermediate Sanctions Compliance," www.irs.gov/pub/irs-tege/m4958a2.pdf
*"Report on Exempt Organizations Executive Compensation Compliance Project—Parts I and II," www.irs.gov/pub/irs-tege/exec._comp._final.pdf
By the way, don't worry, I intend to tell all (perhaps I already have?..., since I am a eye witness...and former WAMC employee, who cannot be bought, not for 20K like your pal Ms. KPG.
Josh Cohen
I thought this would be interesting reading for the WAMC crew, who looks at this site each work day (Selma Kaplan):
http://www.guidestar.org/DisplayArticle.do?articleId=1111
IRS Increases Enforcement Focus on Nonprofit Executive Compensation
Note: The following discussion is provided for informational purposes only and is not intended to serve as legal or tax advice. For specific information about compensation practices for exempt organizations, consult your attorney or tax advisor.
The IRS is sending some pretty strong signals these days that it is going to be looking hard at compensation and benefit levels for nonprofit executives. And nonprofits that want to avoid unwanted scrutiny may need to be more familiar with such terms as "disqualified persons," "excess benefit transactions," and "rebuttable presumption of reasonableness."
*New Form 990 Instructions
The 2006 instructions require more information to be reported on compensation and who sets compensation. Legislation in 2006 required more stringent definitions of "disqualified persons"—those in a position to exercise substantial influence over an exempt organization—and increased penalties for those who participate in an "excess benefit transaction" (a financial transaction in an amount that exceeds market rate) in violation of the rules. The changes are summarized and the new instructions are available on the IRS Web site (see the links at the end of this article).
* New IRS List of Good Governance Practices
A draft list of "Good Governance Practices for 501(c)(3) Organizations" was released by the IRS on February 7, 2007. It stated:
Charities should generally not compensate persons for service on the board of directors except to reimburse direct expenses of such service. ... Charities may pay reasonable compensation for services provided by officers and staff. In determining reasonable compensation, a charity may wish to rely on the rebuttable presumption test of section 4958 of the Internal Revenue Code and Treasury Regulation section of 53.4958-6.
*IRS Findings of 2006 Executive Compensation Initiative Project
In 2006, the IRS concluded an Executive Compensation Initiative Project (started in February 2004). In a report just released on Parts I and II of the project, the IRS noted that "Significant reporting issues exist—Over 30% of compliance check recipients amended their Forms 990. Fifteen percent (15%) of the compliance check recipients were selected for examination." The report also states, "Where problems were found, significant dollars are being assessed (25 examinations have resulted in proposed excise tax assessments under Chapter 42, aggregating in excess of $21 million, against 40 disqualified persons or organization managers.)"
*IRS Investigation of Nonprofit Hospital Executive Compensation
In 2006, as part of an investigation into how nonprofit hospitals set and pay compensation to their executives, the IRS sent questionnaires to more than 500 hospitals. In 2007, the IRS plans to evaluate the responses. Next steps could include more written guidance, new examinations, and additional compliance checks. Congressional leaders have also expressed interest in hospital executive compensation, particularly as the debate over medical costs and coverage has intensified.
*Matching Data Reported to the IRS and SSA
The 2007 plan for the IRS Exempt Organizations Division also includes a project to ensure that nonprofit organizations report and pay employment taxes properly. Recently, the IRS developed a process to match information reported to the Social Security Administration with IRS data. The IRS will select the targets for examination using a risk-modeling program developed in 2006 that identifies high-risk compliance patterns.
What the IRS Notices on Form 990
The nonprofits that were included in the IRS compliance check were chosen because of omissions on their Forms 990. To avoid making similar mistakes, be sure to answer and include any required schedule or explanation for the following sections of the form:
*Schedule A, Part III—List transactions between related individuals or leases of property to officers, directors, or shareholders. If there are no such transactions, note, "None."
*Form 990, Part IV, line 50—List receivables from trustees, officers, directors, and key employees. If there are no such transactions, note, "None."
*Form 990, Part V-A, column B—Complete for each listed officer, trustee, or key employee, even if they are not compensated.
*Form 990, Part VI, question 89—Checkbox for "Entered into an excess benefit transaction." Be sure to check "No" if there were no excess benefit transactions.
What a Nonprofit Should Do
To avoid problems with executive compensation, the IRS advises nonprofits to:
*Set compensation in advance using appropriate comparability data.
*Make sure that no one involved in setting salaries has a conflict of interest.
*Document all decisions on compensation.
*Avoid penalties by reporting all economic benefits to officers, directors, and key employees on Form 990. (By the way, is Alan Chartock's WAMC vehicle listed in this way, nope, and it was me who drove Chartock, in the WAMC car, to his SUNY New Paltz job each Friday, what does that have to do with WAMC?)
Having good compensation practices means having established policies and procedures, doing the homework of finding and assessing comparables, making decisions based upon them, and then recording the actions taken. You are not likely to get in trouble with the IRS if you develop and follow procedures for setting compensation and if you make an honest, responsible effort to determine appropriate compensation based on your size, revenues, organizational structure, and mission. Be sure to:
*Document the policies and procedures in advance and include them in board minutes.
*Collect comparable salaries (for like services, in like enterprises, in like circumstances). Surveys and databases of salary information as well as the Form 990 images on the Web make these data more easily available than ever before.
The IRS has actually provided a checklist for organizations that can be used to establish procedures that will help them avoid an IRS investigation. Follow the checklist, and the burden of proof that the organization is breaking the rules moves to the IRS. This checklist can be found at "Compensation Issues for Exempt Organizations," www.irs.gov/pub/irs-tege/phone_forum_5_2006.pdf, slides 13-19.
To establish a rebuttable presumption of reasonableness (meaning the burden of proof that the compensation is unreasonable is on the IRS), nonprofits should use an independent survey of comparability data. Information and software that easily provide the necessary analyses can be obtained from GuideStar; ERI Economic Research Institute; SalariesReview; Abbott, Langer Association Surveys; and other salary survey sources that specialize in the nonprofit sector.
By obtaining and using appropriate data, nonprofits can set compensation that attracts and retains talented staff and is aligned with organizational missions and values. At the same time, they can ensure that charitable dollars are spent on achieving the mission, not answering questions from the IRS, state charity regulators, and Congress.
More Information
*2006 IRS Form 990 instructions, www.irs.gov/pub/irs-pdf/i990-ez.pdf
*"Compensation Issues for Exempt Organizations," www.irs.gov/pub/irs-tege/phone_forum_5_2006.pdf, especially slides 13-19
*"Good Governance Practices for 501(c)(3) Organizations," www.irs.gov/pub/irs-tege/good_governance_practices.pdf
*"Intermediate Sanctions," www.irs.gov/charities/charitable/article/0,,id=123298,00.html
*"May 17-18, 2006, Executive Compensation Phone Forum," www.irs.gov/pub/irs-tege/may_17_final_script_exec_comp_phone_forum.pdf
*"Rebuttable Presumption Procedure Is Key to Easy Intermediate Sanctions Compliance," www.irs.gov/pub/irs-tege/m4958a2.pdf
*"Report on Exempt Organizations Executive Compensation Compliance Project—Parts I and II," www.irs.gov/pub/irs-tege/exec._comp._final.pdf
By the way, don't worry, I intend to tell all (perhaps I already have?..., since I am a eye witness...and former WAMC employee, who cannot be bought, not for 20K like your pal Ms. KPG.
Josh Cohen
Reading through your entire page it appears that you've been obsessed for SEVEN YEARS that WAMC cancelled your favorite classical music show.
My God, that's so sad. Can't you buy your own CDs? I bet your local library has a good collection that you could take home for free.
You should seriously consider stronger anti-depressants.
No Craig, you should consider that.
Might I suggest you go to work at WAMC, then you will really need anti-depressants.
There is one mentally ill employee at WAMC, Colleen Sullivan. Each year she has a breakdown, usually during the winter fund drive.
She is working for WAMC at Nationalist Productions, cannot work anywhere else, it would not be tolerated.
Alan Chartock thinks it is funny.
That's right Craig, I have to go to bat every year for Colleen. I am not in such great health either, Alan likes keeping weak, totally docile women working for him.
All the better if they are in constant bad health, like me.
I found the way the you posted your article a little confusing. You put a date and a Washington D.C. address. I was thinking "is this a Washington Post article? Washington Times?" It's neither. It's your article. Printed here and no where else. It's got nothing to do with any Washington publication. (Or any Washington agency since the IRS isn't involved.) What is "Washington D.C." doing there except giving your article a false look of authority it doesn't deserve.
You tried to deceive me.
Anonymous,
Tax Cheat's subject, Alan Chartock, resides in Great Barrington, MA. He works at WAMC-FM in Albany, NY. The article was written and posted to the WAMC Northeast PIRATE Network Web site (WAMC.NET) from my home in the Washington, DC metro area (plus I live part of the year in southern Berkshire County). So what dateline would you suggest be used in the article to reflect more accurately its provenance?
Saturday, December 15, 2007
Imperialist Radio: A Hostile Takeover of NCPR?
By now you may have heard. Albany based WAMC is attempting to take over North Country Public Radio's 91.7 fm frequency in Lake Placid. The whole thing stems from the exceedingly rare decision according to NCPR's page on the subject (apparently WAMC could care less about answering questions we in the Adirondacks might have about the situation - they have nothing about it on their page):
After 10 years of refusing to accept new applications for transmitters in the non-commercial section of the FM radio band, the FCC opened a brief 'window' in October.
WAMC applied for a the frequency that is being used by NCPR. You should also know that there are no other full-power frequencies available in Lake Placid,there may not be another opportunity for another frequency for years to come, if ever, and NCPR has been serving this community for a long, long time:
NCPR has used a translator (a low power transmitter) in Lake Placid for 20 years. Translators are NOT protected by the FCC under the rules of the current application period. Therefore, we applied for a full-power transmitter at the same frequency we've used for two decades, 91.7 FM.
It is Imperialist Radio, plain and simple, and here's why:
WAMC does not cover the Adirondacks in any significant way. Go to their webpage and search for Adirondacks - you'll find nothing about the important issues that face the Adirondacks - their coverage is limited to the "big" southern oriented stories - nearly all based on press releases from politicians and advocacy groups. Have they seriously covered North Creek's recent boom and bust in development? How about border issues? How about Potsdam food-coop story? The recent property tax decision? How about the increasingly vibrant blogging community? Local elections? NCPR is an important part of the Adirondacks - does "NCPR" ever show up on their webpage? No. Does "WAMC" ever show up on NCPR's - sure does.
WAMC has hundreds of thousands of people of color in their backyard and yet not a single program oriented to their community needs. Until WAMC hires some people of color (or even offers relevant programming) to cover the neighborhoods (some of which are literally a block or two away from the offices) they have no business marketing to the wealthy in Lake Placid. It's no accident that WAMC broadcast outside it's natural environmental and cultural region into the wealthy lower Hudson Valley and the Berkshires - now they want the wealthiest community in the Adirondacks too. Look at their supposed coverage area - do they really think they can serve Worcester, MA, Sussex, NJ and Lake Placid equally?
WAMC is obviously attempting to take the economic resources from our region to their offices in Albany without returning services to our community. In fact, they will be reducing local news coverage in Lake Placid. They've already done this in Plattsburgh and Ticonderoga. Search for Ticonderoga on the WAMC website - in all of 2007 they've reported just twice about Ticonderoga -both stories about International Paper. Take a look at their events calendar - not a single event in either Plattsburgh or Ticonderoga, or anywhere in the Adirondacks for that matter. Now take a look at NCPR's events calendar.
What should we do? Here is what NCPR says we should do:
We know that NCPR listeners are concerned about this conflict and want to help the station. We appreciate your support and encouragement. At this time, the best thing for you to do is stay informed about the issue--read the information provided here and follow the story as it develops. Share accurate information with others you know.
Here is what I think we should do:
1 - Be informed and inform others. Write about this issue: blog about it, write to local newspapers and media outlets.
2 - Contact WAMC (if you can, they only have one all-encompassing e-mail) and tell them that you know what they're doing and it's wrong - plain and simple. Tell them that you value NCPR and do not want WAMC to damage your LOCAL NPR station. Ask them to withdraw their attempt to take over NCPR's frequency in Lake Placid.
3 - If you have a business from the Mohawk River to the Canadian border, or from the Vermont line to the St. Lawrence / Great Lakes and you advertise with WAMC - contact Dona Frank at 518-465-5233 ext. 167 and ask her to pull your advertisements and start supporting your local NPR station instead. Remember to tell WAMC why.
4 - If you live in the NCPR region now is the time to send some support their way - advertise your business by becoming an underwriter or become a member of the station.
5 - Leave a comment here to let NCPR know that you're thinking about them and wishing them well. When your supposed allies turn on you, hearing form your friends and community makes a difference.
6 - Begin advocating for the removal of Alan Chartock as head of WAMC. He's been unaccountable for far too long.
Good luck NCPR and let us know when and if there is anything we can do to support our best local radio station.
Posted By The Almanack Editor at 12:32 PM 4 comments Related Stories
Categories: Clinton County, Essex County, Lake Placid, media, NCPR, Plattsburgh, radio, Ticonderoga, WAMC, Warren County
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