Interesting discussion on NIL and IRS. Will NIL be around? Interesting the IRS definition that makes it non-taxable goes against how it is being used. At least according to the ESPN radio this morning. The discussion moved to using the TV money and NIL to standardize scholarships for non-full scholarship sports. That those that are getting NIL for revenue, should move to the next level of professional sports.

So, how does NIL being taxable impact this system? If true, Baylor appears smart to go with the team-wide NIL easier to defend educational nexus, at least to my uninformed thoughts ( I am in no way a tax person). So, this may be off base. I hope not, it could help even playing field.

IRS Addresses Non-Exempt Tax Status for NIL Organizations | Alerts and Articles | Insights | Ballard Spahr

IRS addresses whether college NIL collectives further an exempt purpose - Journal of Accountancy

FLBear5630 said:

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Interesting discussion on NIL and IRS. Will NIL be around? Interesting the IRS definition that makes it non-taxable goes against how it is being used. At least according to the ESPN radio this morning. The discussion moved to using the TV money and NIL to standardize scholarships for non-full scholarship sports. That those that are getting NIL for revenue, should move to the next level of professional sports.

So, how does NIL being taxable impact this system? If true, Baylor appears smart to go with the team-wide NIL easier to defend educational nexus, at least to my uninformed thoughts ( I am in no way a tax person). So, this may be off base. I hope not, it could help even playing field.

IRS Addresses Non-Exempt Tax Status for NIL Organizations | Alerts and Articles | Insights | Ballard Spahr

IRS addresses whether college NIL collectives further an exempt purpose - Journal of Accountancy

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These articles deal with the tax deductibility of the contributions to Collectives. My speculation is that the IRS will stop granting 501c3 status to Collectives and begin the process of revoking 501c3 status for those who have been granted 501c3 status. This will be an interesting topic to follow.

These article do not address the tax liability that student athletes incur when receiving NIL money.

Polycarp said:

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FLBear5630 said:

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Interesting discussion on NIL and IRS. Will NIL be around? Interesting the IRS definition that makes it non-taxable goes against how it is being used. At least according to the ESPN radio this morning. The discussion moved to using the TV money and NIL to standardize scholarships for non-full scholarship sports. That those that are getting NIL for revenue, should move to the next level of professional sports.

So, how does NIL being taxable impact this system? If true, Baylor appears smart to go with the team-wide NIL easier to defend educational nexus, at least to my uninformed thoughts ( I am in no way a tax person). So, this may be off base. I hope not, it could help even playing field.

IRS Addresses Non-Exempt Tax Status for NIL Organizations | Alerts and Articles | Insights | Ballard Spahr

IRS addresses whether college NIL collectives further an exempt purpose - Journal of Accountancy

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These articles deal with the tax deductibility of the contributions to Collectives. My speculation is that the IRS will stop granting 501c3 status to Collectives and begin the process of revoking 501c3 status for those who have been granted 501c3 status. This will be an interesting topic to follow.

These article do not address the tax liability that student athletes incur when receiving NIL money.

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Yeah, the ESPN discussion on the radio did, basically saying anyone using NIL to make money needs to move to the next level or it will be taxed as income. Then he brought up State income tax and if for example the LSU gymnast makes money in CA does she pay taxes there like the pros do. How about going to different Nations, does the amount of influencers that go up mean she pays taxes there, like F1?

They want to be treated like pros for generating income, there are adult responsibilities that come with compensation. This golden age is not going to last long, every Govt is looking for revenue. Not only that, the rest of the University wants a cut.

There are also actual rules against a 501c3 giving money to individuals unless it is a scholarship or grant. And with the grants requiring applications and open to a specific class of individuals. The tax issues may be more for the givers who perhaps shouldn't be able to deduct such "contributions" than the ones on the receiving end. And if it is said these are scholarships then the money would seem to have to end up in the school's pocket, not the player's.

I'm sure some have already worked this out or figured out how to get around the rules, but the devil is in the details and probably not all these "donors" (versus "employers whose employees get paid to play") have considered all the details or even care. This whole thing needs to fall flat on its face. It is pay for play any way you want to spin it. I am going to have to wait a long time before a "nerd" student in one of the science labs that figures out a way to cure cancer, stop gun violence, or do anything else that actually betters our lives gets to profit on his/her name, image, or likeness. That "nerd" student may spend way more time doing what they do than what some athlete does that needs 15 tutors just to make a C- in an introductory math class and still can't tell you squat about how laws in this country are made. Our priorities on who deserves to be supported are way screwed up.

blackie said:

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There are also actual rules against a 501c3 giving money to individuals unless it is a scholarship or grant. And with the grants requiring applications and open to a specific class of individuals. The tax issues may be more for the givers who perhaps shouldn't be able to deduct such "contributions" than the ones on the receiving end. And if it is said these are scholarships then the money would seem to have to end up in the school's pocket, not the player's.

I'm sure some have already worked this out or figured out how to get around the rules, but the devil is in the details and probably not all these "donors" (versus "employers whose employees get paid to play") have considered all the details or even care. This whole thing needs to fall flat on its face. It is pay for play any way you want to spin it. I am going to have to wait a long time before a "nerd" student in one of the science labs that figures out a way to cure cancer, stop gun violence, or do anything else that actually betters our lives gets to profit on his/her name, image, or likeness. That "nerd" student may spend way more time doing what they do than what some athlete does that needs 15 tutors just to make a C- in an introductory math class and still can't tell you squat about how laws in this country are made. Our priorities on who deserves to be supported are way screwed up.

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No argument there. Capitalism in education, not a big fan.

As for the Student "Athlete", if you are getting your school paid for AND taking home 50k you should pay taxes on the 50k.

FLBear5630 said:

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blackie said:

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There are also actual rules against a 501c3 giving money to individuals unless it is a scholarship or grant. And with the grants requiring applications and open to a specific class of individuals. The tax issues may be more for the givers who perhaps shouldn't be able to deduct such "contributions" than the ones on the receiving end. And if it is said these are scholarships then the money would seem to have to end up in the school's pocket, not the player's.

I'm sure some have already worked this out or figured out how to get around the rules, but the devil is in the details and probably not all these "donors" (versus "employers whose employees get paid to play") have considered all the details or even care. This whole thing needs to fall flat on its face. It is pay for play any way you want to spin it. I am going to have to wait a long time before a "nerd" student in one of the science labs that figures out a way to cure cancer, stop gun violence, or do anything else that actually betters our lives gets to profit on his/her name, image, or likeness. That "nerd" student may spend way more time doing what they do than what some athlete does that needs 15 tutors just to make a C- in an introductory math class and still can't tell you squat about how laws in this country are made. Our priorities on who deserves to be supported are way screwed up.

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No argument there. Capitalism in education, not a big fan.

As for the Student "Athlete", if you are getting your school paid for AND taking home 50k you should pay taxes on the 50k.

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Agreed. Seems pretty straightforward that NIL money is income.

Harrison Bergeron said:

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FLBear5630 said:

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blackie said:

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There are also actual rules against a 501c3 giving money to individuals unless it is a scholarship or grant. And with the grants requiring applications and open to a specific class of individuals. The tax issues may be more for the givers who perhaps shouldn't be able to deduct such "contributions" than the ones on the receiving end. And if it is said these are scholarships then the money would seem to have to end up in the school's pocket, not the player's.

I'm sure some have already worked this out or figured out how to get around the rules, but the devil is in the details and probably not all these "donors" (versus "employers whose employees get paid to play") have considered all the details or even care. This whole thing needs to fall flat on its face. It is pay for play any way you want to spin it. I am going to have to wait a long time before a "nerd" student in one of the science labs that figures out a way to cure cancer, stop gun violence, or do anything else that actually betters our lives gets to profit on his/her name, image, or likeness. That "nerd" student may spend way more time doing what they do than what some athlete does that needs 15 tutors just to make a C- in an introductory math class and still can't tell you squat about how laws in this country are made. Our priorities on who deserves to be supported are way screwed up.

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No argument there. Capitalism in education, not a big fan.

As for the Student "Athlete", if you are getting your school paid for AND taking home 50k you should pay taxes on the 50k.

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Agreed. Seems pretty straightforward that NIL money is income.

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I don't know if it changed, but Baylor mentioned a team approach to NIL. I wonder if that changes things as it is a benefit given as part of the scholarship equally, especially if the balance is used to fund other non-rev sports giving more opportunities. I can see that qualifying.

Polycarp said:

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FLBear5630 said:

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Interesting discussion on NIL and IRS. Will NIL be around? Interesting the IRS definition that makes it non-taxable goes against how it is being used. At least according to the ESPN radio this morning. The discussion moved to using the TV money and NIL to standardize scholarships for non-full scholarship sports. That those that are getting NIL for revenue, should move to the next level of professional sports.

So, how does NIL being taxable impact this system? If true, Baylor appears smart to go with the team-wide NIL easier to defend educational nexus, at least to my uninformed thoughts ( I am in no way a tax person). So, this may be off base. I hope not, it could help even playing field.

IRS Addresses Non-Exempt Tax Status for NIL Organizations | Alerts and Articles | Insights | Ballard Spahr

IRS addresses whether college NIL collectives further an exempt purpose - Journal of Accountancy

---

These articles deal with the tax deductibility of the contributions to Collectives. My speculation is that the IRS will stop granting 501c3 status to Collectives and begin the process of revoking 501c3 status for those who have been granted 501c3 status. This will be an interesting topic to follow.

These article do not address the tax liability that student athletes incur when receiving NIL money.

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Yep. Good take. I'm sure the income to the athletes, which I think is usually in the form of salary, is taxable. Why would it not be?

There has long been a growing tension between tax exempt universities and the very profitable quasi-professional sports teams they host. This NIL stuff ratchets that tension way up. It was really hoping for too much to have all of that be tax deductible.

There is nothing about college athletics that is about education. It should all be taxed and donations to athletics should not be deductible.

CorsicanaBear said:

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There is nothing about college athletics that is about education. It should all be taxed and donations to athletics should not be deductible.

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I tend to agree with this, perhaps with some rare possible exceptions.

I think there needs to be a lot of 501c reform as well.

CorsicanaBear said:

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There is nothing about college athletics that is about education. It should all be taxed and donations to athletics should not be deductible.

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I am with you.

If they want to make it tax deductible major and graduate in a field of need. I would have less trouble with that. Even a school teacher degree (not the hardest to get), nursing, engineering, or any other area our nation needs. But, to me there has to be some value if it is tax deductible besides the athletic, which they are getting paid.

Robert Wilson said:

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Polycarp said:

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FLBear5630 said:

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Interesting discussion on NIL and IRS. Will NIL be around? Interesting the IRS definition that makes it non-taxable goes against how it is being used. At least according to the ESPN radio this morning. The discussion moved to using the TV money and NIL to standardize scholarships for non-full scholarship sports. That those that are getting NIL for revenue, should move to the next level of professional sports.

So, how does NIL being taxable impact this system? If true, Baylor appears smart to go with the team-wide NIL easier to defend educational nexus, at least to my uninformed thoughts ( I am in no way a tax person). So, this may be off base. I hope not, it could help even playing field.

IRS Addresses Non-Exempt Tax Status for NIL Organizations | Alerts and Articles | Insights | Ballard Spahr

IRS addresses whether college NIL collectives further an exempt purpose - Journal of Accountancy

---

These articles deal with the tax deductibility of the contributions to Collectives. My speculation is that the IRS will stop granting 501c3 status to Collectives and begin the process of revoking 501c3 status for those who have been granted 501c3 status. This will be an interesting topic to follow.

These article do not address the tax liability that student athletes incur when receiving NIL money.

---

Yep. Good take. I'm sure the income to the athletes, which I think is usually in the form of salary, is taxable. Why would it not be?

There has long been a growing tension between tax exempt universities and the very profitable quasi-professional sports teams they host. This NIL stuff ratchets that tension way up. It was really hoping for too much to have all of that be tax deductible.

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I don't know if combines or whatever they call themselves have the same benefit as individuals, but if they were "individuals", individuals can give up to $17,000 a year (current limit) to anybody and as many "anybodys" as they want and it can be classified as a "gift" and not be subject to gift tax or a taxable item for the beneficiary. Haven't heard anyone use that line of thinking however. However a 501c3 cannot be an individual, at least I wouldn't think so, so I don't see them being able to call it a "gift", and has been mentioned above anything beyond de minimus amounts to individuals are generally verboten from a charitable organization.

To be honest, the entire tax code needs major reform & maybe a complete overhaul. Ideally, that would begin with the repeal of the 16th amendment and the end is income taxes. The Founding Fathers were correct to ban them from the start. Since that's not going to happen, given the difficulty of amending the constitution (by design), something else should be done.

Since any change usually begins with politicians, I'm not very optimistic.