Dan Frishberg – the money man – and the IRS? It is that time of year…

Two things…related to Dan Frishberg and the now defunct BizRadio:

One – tomorrow is April 1st – April fools day – so here’s a question: who is attending Dan’s special “sold out” seminar to be held tomorrow?  If you attend, will you please provide some input into attendance and benefit from the seminar.  You can do that through your comments on this blog or privately share your thoughts by contacting me at chuck @ chuckgallagher.com.

I hope this isn’t an April fools joke – surely there is a seminar tomorrow night?

Item #2 – most everyone knows it’s tax season and if you haven’t filed you’ve got two weeks.  I say most everyone knows…  seems that Wesley Snipes forgot about that for several years and he got sentenced to three years in prison (he’s out on appeal thus far).  But I have some questions that would apply for the 2010 filing season in 2011.  So here goes…

  • Salem Communications is taking 1110 am back and BizRadio is effectively no more…
  • They are giving Dan Frishberg $800,000 for his interest.  QUESTION: Is Dan getting the $800,000 or is that doing to the entity that was BizRadio?  And does that income represent a loss or gain on the asset?
  • More importantly, Salem agrees (according to published reports) to give Dan Frishberg $1,600,000 of “free time” on their radio stations around the US to do his radio program.  QUESTION: He’s getting “free” time…  Isn’t that income?  Remember: income from all sources is taxable unless specifically excluded from the statutes.  Bartered income – free time for services – would clearly appear to be a taxable transaction.
  • Wait a second – hold it a minute – are they giving the time to BizRadio or to Dan Frishberg?
  • Isn’t Rehan Siddiqi going to be standing at the front of the line asking for some of that $800,000?
  • Aren’t there several groups of people standing in line wanting a piece of the $800,000 pie including the SEC receiver?
  • THE BROADER QUESTION:  If you were given $1.6 million in air time – what is that worth today if it were sold?  Is it worth today half that – three quarters of that – what is the present value of $1.6 million of Salem Communication air time?  Isn’t that, since it doesn’t seem to be related to taking back the station, a taxable transaction?
  • Dan is broadcasting his show on 1110 am now – so is he paying for that time or is that time accruing against the $1.6 million air time commitment?  Unless Dan is paying for it, it would appear that there is a tax implication at the least.
  • The other major question is – how is Dan monetizing his show today for the benefit of the apparent defrauded investors?  Is he using the show to produce a profit so that unsuspecting investors have an opportunity to get a return on their investment, or is Dan using the show to personally benefit Dan and his RIA (now transferred to another firm)?  I admit it is confusing…so comments that clarify are welcome.

Let me be clear…in no way am I inferring that Dan Frishberg has violated in any way the tax law.  Rather, I am pointing out that the BizRadio sale and “free time” agreement (at least what is public) would likely create a tax implication in the future.

Where is all this going…I don’t know.  What I do know is – there are many victims and a deafening silence from Dan “the money man” Frishberg.  As an ethics speaker and author, I would feel much better if Dan would step up and clear any misunderstandings that might be out there and share with investor “victims” his plan to create wealth for them.

YOUR COMMENTS ARE WELCOME!

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One Response to Dan Frishberg – the money man – and the IRS? It is that time of year…

  1. Chuck you ask the right questions. The tax impact on any transaction comes down to the fine print in the contract, in this case between Frishberg & Salem. On your question is $1.6 million in air time a taxable transaction? The answer is absolutely yes. Barter is treated just like receiving cash for tax purposes. The murkier question, is which entities are parties to the agreements. If the same entitity that bought the station also sells it and receives airtime there may not be a taxable gain. On the other hand, if entity “A” sells the station and entity “B” gets the airtime, then entity “B” is going to be writing the IRS a very big check.

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