Tax-exempt status in question for certain nonprofit NIL collectives
Originally Published 2 years ago — by ESPN
Nonprofit collectives that pay college athletes to promote charities may not qualify as tax-exempt, according to a recent memo from the Internal Revenue Service (IRS). The memo states that if the main purpose of these collectives is paying players instead of supporting charitable works, they may not be eligible for tax-exempt status. This could potentially impact the donations they receive and the ability to continue their operations. While some collectives have already been granted tax-exempt status, the IRS has laid out new guidelines for their operation. The memo has raised concerns among donors and schools, and it remains to be seen how it will affect the nonprofit collectives and the college athlete marketplace.