Since 2021 the NCAA has allowed college athletes to be paid for their names, images, and likeness. Fans of these players have created nonprofit collectives to help the athletes set up such deals, but last month, the IRS took aim at those collectives, explaining they are not in compliance with the section of the tax code that provides charitable status.
In the article, Betsy Schmidt, Professor of Practice in Public Policy, explained that these collectives have no exempt purpose. “Even if there were some charitable purpose,” she said, “the IRS is saying—correctly, in my opinion—that the benefit is to a small group of college athletes, not to the general public.