NIL money is not free manna falling from the skies.

Kid, meet IRS. IRS, meet kid.

If it post successfully, listen to the audio I have attached from a tax service.

Cliff notes:
NIL payments are taxed as contracted income, not wages.
NIL payments over $600 must be reported by Form 1099
NIL payments are self employment income to be reported and taxed accordingly.
NIL payments are personal service income that must be reported on Form 1040
Schools, and NIL providers, cannot provide professional consultations to the athletes since that is a benefit not available to other students.

https://content.libsyn.com/p/f/2/9/f297a75743d21d59/FTM_08-02-22.mp3?c_id=132960675&cs_id=132960675&response-content-type=audio%2Fmpeg&Expires=1659451862&Signature=Z1LNb5ZeLTJ2QZbhiZe5xB7KQ0jwc5V7RE9zv0SjNjyZY09DlFgKeUBKp2YqyM0C-lUfb0MgkHl4hZd8W1kjDMLttf2kS6Igh3W~bTZFLua~peYqSif6Rd2aAe0RTX9ikqMkQ0Z3tBUDNWhe4LO1IOy8BvtlwAXnnZyPKNrVPaVoteFkublTxrHkW0nPsH9jhqTb~AP~ilebkAx12GNoFr5nPDkZ~PU6sr9lWkWXjrixd6OE1-jCzVq6WLeotmPllQF6ug4iNOakY7eqaEUDzb6PT-nnsRecHLsDmo0qsa4ZdZTiJGdBj0pA9lRjBq9mozQ0XwGI07CJHCpvVDQ97w__&Key-Pair-Id=K1YS7LZGUP96OI

Bounty hunters: want to earn a finders fee from the IRS? Just turn in to the IRS the list of players on a roster, such as at A&M who openly brag about these payments for a complete team, who get NIL money, and let the IRS determine if the players are properly reporting their income.

jumpinjoe said:

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NIL money is not free manna falling from the skies.

Kid, meet IRS. IRS, meet kid.

If it post successfully, listen to the audio I have attached from a tax service.

Cliff notes:
NIL payments are taxed as contracted income, not wages.
NIL payments over $600 must be reported by Form 1099
NIL payments are self employment income to be reported and taxed accordingly.
NIL payments are personal service income that must be reported on Form 1040
Schools, and NIL providers, cannot provide professional consultations to the athletes since that is a benefit not available to other students.

https://content.libsyn.com/p/f/2/9/f297a75743d21d59/FTM_08-02-22.mp3?c_id=132960675&cs_id=132960675&response-content-type=audio%2Fmpeg&Expires=1659451862&Signature=Z1LNb5ZeLTJ2QZbhiZe5xB7KQ0jwc5V7RE9zv0SjNjyZY09DlFgKeUBKp2YqyM0C-lUfb0MgkHl4hZd8W1kjDMLttf2kS6Igh3W~bTZFLua~peYqSif6Rd2aAe0RTX9ikqMkQ0Z3tBUDNWhe4LO1IOy8BvtlwAXnnZyPKNrVPaVoteFkublTxrHkW0nPsH9jhqTb~AP~ilebkAx12GNoFr5nPDkZ~PU6sr9lWkWXjrixd6OE1-jCzVq6WLeotmPllQF6ug4iNOakY7eqaEUDzb6PT-nnsRecHLsDmo0qsa4ZdZTiJGdBj0pA9lRjBq9mozQ0XwGI07CJHCpvVDQ97w__&Key-Pair-Id=K1YS7LZGUP96OI

Bounty hunters: want to earn a finders fee from the IRS? Just turn in to the IRS the list of players on a roster, such as at A&M who openly brag about these payments for a complete team, who get NIL money, and let the IRS determine if the players are properly reporting their income.

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Maybe the players can hire Vince Young's uncle to manage that money. What could possibly go wrong???

While everything you mention is true, the concern should be largely unfounded. In addition to compliance courses already in place, most programs are now offering Entrepreneurship courses that address NIL opportunities. These courses and programs assist the student with marketing, negotiating, and of course accounting for their projects.
From a football perspective, certainly, these courses are a welcome addition since too many NFL rookies aren't prepared for their first contracts and incident bonuses.

Just say NIL taxes are t'racist and problem solved.

Excellent points.

As far as the thread title goes, college students are not ready for financial decisions like this. Look at how many young people (not just athletes) have graduated and are not able to pay off college loans. Some did not even finish their degree.

A lot's been made of this "wild west" NIL landscape, but I assure you that these kids are not being forced by these programs to spare a fleeting thought for their taxes, let alone handle the entire process themselves.

None of these pieces of information are unknown or unexplored by programs with enough clout to pay big dollar NIL checks to its athletes. If a program is big enough that the IRS will care about its taxable NIL spending, they already have the legal counsel in place to handle it.

NCAA rules don't allow the schools themselves to offer counsel and handle their money, but they explicitly allow professional service providers to do that work for them. In fact, it's baked right into the NCAA bylaws.

• Individuals can use a professional services provider for NIL activities.

Schools like Ohio State and A&M and whoever else just refer students to the local tax guy they have a relationship with and they handle all that for them. It's not like they're just handing them a brown paper envelope under the table with no strings attached, the money is monitored.

Now, whether it's wasted on the fleeting whims of entitled 18-year-olds is another matter entirely...

College recruiters have 18 year old sign documents that will put them hundreds of thousands of dollars in debt by the time they are 22. Of course they aren't ready for it, but it's not much different than the other things we put in front of them that they aren't ready for.