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Orange Blooded [4610]
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WSJ: IRS says NIL "donations" not deductible
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Jun 14, 2023, 8:21 AM
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IRS Nixes Tax Edge for College-Sports Booster Groups Paying Athletes
Getting cash to college athletes isn’t a charitable purpose, the IRS says. Audits could follow.
The Internal Revenue Service began blocking an increasingly popular method for funneling wealthy boosters’ money to college athletes, declaring that so-called “name, image and likeness” collectives generally can’t be structured as charities.
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110%er [8127]
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Re: WSJ: IRS says NIL "donations" not deductible
Jun 14, 2023, 8:34 AM
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Wont matter as fans from teams like UGA have a long history of funneling money to athletes without the benefit of a tax deduction.
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CU Guru [1058]
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That is not a surprise, there is nothing about the
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Jun 14, 2023, 8:35 AM
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collectives that would indicate they are public charities. At best a business could attempt to claim advertising expense, but there would have to be a connection with the NIL of the player promoting the business that paid for the advertising, and the value of the marketing received by the business must correlate with the amount the business paid for it. So really, I don't see a deduction anywhere for NIL funding except ex. the car dealership letting a kid drive a truck and appear in ads to players in Dr. Pepper/BoJangles ads.
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110%er [8127]
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Re: That is not a surprise, there is nothing about the
Jun 14, 2023, 9:00 AM
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I really wish we had a simple tax code where everyone paid a % of their earnings with no deductions. Life would be much simpler and also a lot more fair for all concerned
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Hall of Famer [24272]
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CU Guru [1870]
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Re: WSJ: IRS says NIL "donations" not deductible
Jun 14, 2023, 8:42 AM
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The obvious right call. Lots of folks will be coughing up some extra cash to Uncle Sam, especially the big hitters that donated large sums and were able to deduct up to 60% of their AGI for the year.
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Orange Blooded [3410]
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Re: WSJ: IRS says NIL "donations" not deductible
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Jun 14, 2023, 10:29 AM
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Simple sales tax would also tax all of the under the table cash people are making and not claiming. Another benefit is it would tax illegal income such as drugs, moonshiners (real one’s not brewery’s), prostitution, etc. If all of these people start paying taxes and the average % would come down for the middle class.
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110%er [7670]
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Re: WSJ: IRS says NIL "donations" not deductible
Jun 14, 2023, 10:10 AM
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Booster can just pay to the player and player is an independent contractor therefore the booster just uses the W9/1099 player and booster writes full payment off. Or Player just needs to setup an LLC for $99 and then the booster pays the LLC for services rendered. Both scenarios the player is fully responsible for taxes. But seriously, do you think the boosters are worrying about players tax issues as long as they get them on campus? Player is only around a few yrs and IRS will not have caught up by then. I see many young players getting into Tax Fraud issues in the future.
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CU Guru [1942]
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Re: WSJ: IRS says NIL "donations" not deductible
Jun 14, 2023, 10:39 AM
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I think "Tiger Impact" ought to be eligible. If you're paying a Kid to do charity work that is no less charity than if I give to Red Cross and their CEO makes a couple of million. IMO
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Commissioner [977]
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Re: WSJ: IRS says NIL "donations" not deductible
Jun 14, 2023, 10:41 AM
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Yeah, your right for sure. I'm sure all these kids taking the NIL money don't realize the tax effect to them. I could see in a couple years, IF they enforce it, a big tax bill comes due then what happens.
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CU Guru [1058]
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The athletes know it is taxable. NIL $ is the blatently
Jun 14, 2023, 11:32 AM
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compensation. The athletes have taxable income regardless of it comes through a charity collective, non-charity, collective, or direct from a business. It will be on a 1099 or W2, the IRS really doesn't have to do anything to enforce it because their computers will generate those notices without any human effort.
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Legend [17751]
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Probably the right call
Jun 14, 2023, 10:55 AM
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But it highlights college football is often for the wealthy and fanatical. In today's world, the college players are already gifted and often privileged from a young age. The wealthy boosters' contributions are often supplemented by fans who may or may not have any money -- these fans like addicted gamblers may be hurting their kids and families to get closer to a program.
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CU Guru [1894]
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Re: WSJ: IRS says NIL "donations" not deductible
Jun 14, 2023, 11:50 AM
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If the athlete performs some advertising services for a business, the payment could be deductible as an ordinary and necessary business expense.
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