calumnus said:
wifeisafurd said:
calumnus said:
Bobodeluxe said:
The American can-do spirit is alive and well
From the socialist NYTimes:
'The upheaval has its roots in a Supreme Court decision and a handful of state laws that made it illegal in 2021 for the N.C.A.A. to continue its longstanding prohibition on athletes making money from endorsements. In dropping the ban, the N.C.A.A. assumed the result would be a way for star athletes to get endorsement deals, a cut of jersey sales or money for acting as social media influencers also known as "name, image, likeness" arrangements, or N.I.L.
Instead, a very different model sprang up in parallel, one in which the collectives have effectively hijacked the N.I.L. system to circumvent the N.C.A.A.'s still-in-force ban on paying players to play by finding ways to get more money to more athletes.
The collective system is "a pay-for-play scheme disguised as N.I.L.," Tony Petitti, the commissioner of the Big Ten Conference, said at a Senate hearing this week. "We are concerned that management of college athletics is shifting away from the universities to collectives."'
"the collectives have effectively hijacked the N.I.L. system to circumvent the N.C.A.A.'s still-in-force ban on paying players to play by finding ways to get more money to more athletes."
"Still-in-force-ban" should be "still-on-the-books ban"
This result was entirely predictable because even when a player receives money for their name, image and likeness, it is mostly because they play for a team and there is no way to determine how much is too much and even if there is there is no one with the legal authority to regulate it.
Are most NIL collectives still claiming to be tax deductible? I know Cal's isn't. If the IRS hasn't challenged any of them yet, it might make sense to switch over with a disclaimer until they do?
Treasury department guidance to auditors is that collectives are not tax-exempt and to audit contributors to collectives who are deducting NIL payments. Note: companies who use players for advertising and other business related matters (e.g., appearances) have a busies deduction. We all thought that actually was the original intent of the NIL ruling so that college players could be placed on the same basis as NFL players who are spokesman for companies, but alas it has become pay to play for many. Calford's collectives may be somewhat unique in actually obeying the rules.
Yes, Cal and Stanford play by both the current rules and a strict interpretation of what the rules should be while other schools push right through any gray area, right past any "guidance" pushing the limits until explicitly forbidden by rule law, then try figure out how not to get caught.
Putting that aside, the "public benefit" question is interesting. Donating to the school money targeted for scholarships and stipends for grad students on a particular program is tax deductible. Donating to the AD money targeted for football scholarships is tax-deductible. I assume donating money to the AD to pay coaches salaries is tax deductible? If so, why wouldn't donations that go for player salaries? I don't see how the coach is more of public benefit than the players.
It seems to me a donor who gives money to keep Jadyn Ott at Cal is providing more than a private benefit for Ott and themselves, they are donating for the public benefit of Cal football and the financial well being of the university's athletics programs.
I see where you are going. Welcome to Pandora's box.
This is easier looking at private schools. Athletics have been interpreted to be part of a college's charitable purpose and private colleges that play D1 football generally are almost all tax-exempt entities. As long at that is the case, donating money for that purpose is going to be for a charitable purpose, outside of discrete legislative carve outs such as donations made in connection with obtaining benefit of football tickets, such as a priority in seating.
For tax purposes, college athletes' earning NIL gross income are viewed as cash-basis, sole proprietor, individual taxpayers and not employees of the school, and will more than likely be considered "self-employed" under the status of an independent contractor. Since student-athletes aren't considered employees of a collective, their school, or the NCAA (the IRS has not read Justice Kavanaugh's concurring opinion), they also appear to be on the hook for self-employment tax as independent contractors. The view then is that you the donor are benefiting a third party, and not the charitable organizations, as opposed to employee, such as a coach or professor who you are endowing. This kind of falls apart tomorrow on the public school side, if the State (that can decide who is an employee and who is not), makes the athletes employees at public schools. Why wouldn't they? Because their tuition, room and board now becomes taxable and this becomes phantom income; that is, taxable income that isn't paid to the one responsible for paying taxes on it, so there is tax and no cash to pay the liability. A horrible result for non-revenue and many revenue sport players, and really horrible result at private instituions.
If the employees are made to be employees, many P5 schools simply will not have scholarship athletes, or sport teams, absent changes in the tax laws or some form or legislation or collective bargaining "fixing" the situation. A drop down of football to a separate conference level with difference rules has been discussed as on of those fixes in conjunction with legislation.
